What is the importance of Vietnam’s free trade agreements (FTAs)?

Vietnam has a number of FTAs, but those of particular interest to foreign companies are its FTA with ASEAN and ASEAN’s FTA with India and China. This mean that if a company is manufacturing a product in ASEAN that fits into either China or India’s FTAs, the product can be exported to either of those markets duty free.

Vietnam is also finalizing negotiations for an FTA with the EU. Furthermore, when the Trans-Pacific Partnership (TPP) is concluded, the country will have tariff free access to some of the largest markets in the world, such as the United States. Additionally, when the Regional Comprehensive Economic Partnership (RCEP) negotiations conclude in 2015, Vietnam and the ASEAN trade bloc will also be able to participate in free trade with China, India, Japan, South Korea, Australia and New Zealand. Because of this, the RCEP is set to be a really exciting opportunity for foreign companies.

The emergence of Vietnam as one of the world’s fastest growing economies is having a significant impact upon shaping the future of foreign investment into Asia. While in the mainstream media the country is often overlooked in favor of China business news, Vietnam is now emerging as a serious alternative to China, and is in fact following roughly the same growth trajectory that China embarked on 20 years ago. Today, it is Vietnam, not China, which is the developing market of choice for many investors.