FTAs bewilder many Vietnam business owners As the government prepares to seal a fresh trade deal with the twelve-nations of the Trans Pacific Partnership (TPP), a new survey has revealed that most Vietnam business owners neither understand nor make use of existing ones. The Vietnam government has recently negotiated 10 free trade agreements (FTAs) and is trying to reach agreement on yet others in the coming time as part of its overall strategy to boost partnership with many economic powers. However, the survey conducted by the Ho Chi Minh City Support Centre on World Trade Organization Integration shows that most Vietnamese business owners have little or no understanding of the provisions of any FTAs. Up to 90% of Vietnam businesses are very small and closely held by a limited number of owners so it is not surprising that some would generally not be aware of the details of extremely complex trade deals, said Pham Binh An, director of the Centre. What is startling, however, is the sheer number of business owners that just shook their head in bewilderment and said they either don’t or couldn’t understand the complex agreements. “When asked about specific FTAs with particular foreign government such as the agreement with the Republic of Korea (RoK) the majority of responses was that they had never heard of the agreement," An said. "So yes, I think, many companies miss the benefits of the FTAs." An stressed that it is problematic such a staggering number of business owners failed to possess even a basic grasp of the content of the FTAs and their impact on the economy in general and their business specifically.   When asked how frequently they used government trade support initiatives including the services of the Vietnam trade offices and other trade promotion agencies, most respondents said they "never" used the services. Ly Kim Chi, president of the Food and Foodstuff Association in Ho Chi Minh City, in turn said the results of another survey by the Association show that 80% of very small and medium sized enterprises (SMEs) lack even basic information on how to obtain information regarding the contents of FTAs. Professor Doan Thi Hong Van from the University of Economics in HCM City has also reported that the results of many workshops and forums organized by the University have been disappointing and in the final analysis unproductive. "The results suggest that business owners are generally either not aware of the trade support available, it does not address their needs, or they do not perceive the prospective gain to be worth the effort in utilising the service," Van said. Most importantly business owners need to be informed about key issues such as rules of origin – a new technical barrier that may limit or disable the benefits of tariff reductions – anti-dumping and other major rules of the free trade agreements. For example, strict ‘rules-of-origin’ require that any textile and apparel exports by Vietnam businesses to the US be wholly assembled within the 12 TPP member countries to qualify for tariff-free treatment under that pact. This means Vietnam businesses cannot import fabric from a third country, such as China or certain ASEAN nations and use it to make clothing that qualifies for tariff-free treatment by the 12 TPP member nations. The rule is commonly referred to as ‘the yarn forward rule’ in essence requires that only fabric produced from yarn made by a TPP member country would qualify for the trade agreement’s tariff-free status. Professor Ban said the rules of origin are complicated, costly to comply with— but a necessity for Vietnam business owners to understand if they want to get into the developing supply chains in Vietnam and on the road to prosperity. It is inarguable that Vietnam business owners need to better understand the regulatory overview of tariff commitments of FTAs and their provisions,Professor Doan Van stressed. As well, the government and the nation must strive to implement an improved system to convey the major content of the FTAs to business owners and assist them become more competitive in the nation’s dynamic period of integration.  The 12 countries involved in the TPP negotiations include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam; they represent a market of almost 800 million people and a combined gross domestic product of more than US$25 trillion. VOV