Question:
How will the EVFTA agreement affect the market share of domestic businesses in the face of competition from EU companies?
Answer:
In assessments of the impact of the EVFTA agreement, a recurring challenge is the increased competition pressure on domestic goods as high-quality European products gain access to the Vietnamese market. However, it’s important to consider factors such as the complementary economic structures of the EU and Vietnam, which do not directly confront each other, and Vietnam’s phased market opening commitments, especially for sensitive product groups. Therefore, the competitive pressure brought by the EVFTA is considered constructive, reasonable, selective, and follows a suitable timeline.
Additionally, it’s crucial to recognize that competition always has two distinct sides. On one hand, competition can have negative consequences for weaker businesses, especially those reliant on state support or those with outdated production and business practices. On the other hand, competition provides motivation for businesses to continuously innovate and create, while also offering consumers more choices. This is a path that sooner or later Vietnam must traverse to renew its growth model, shift its economic structure successfully, and move toward enhancing value-added, quality, and efficiency in economic growth.
