In today’s globally integrated economy, free trade agreements (FTAs) play a strategic role in helping businesses involved in international trade expand their markets and attract foreign investment. A clear understanding of these FTAs - and the ability to leverage them effectively - can provide a strong foundation for Vietnamese businesses to integrate more deeply into the global value chain.
What is a Vietnam Free trade agreement?
Vietnam is currently a member of many new-generation free trade agreements with global reach
Free trade agreements (FTAs) are agreements between two or more countries to reduce or eliminate barriers to the trade of goods and services, including tariffs, quotas, and other restrictive regulations. By expanding trade opportunities and providing protections for investors, intellectual property rights, and other related legal factors, participants in an FTA can achieve greater economic benefits and promote sustainable growth.
In the context of rapid globalization, participation in free trade agreements (FTAs) has become an indispensable part of many countries’ economic development and international cooperation strategies. As of early 2025, according to a report from the Ministry of Industry and Trade, Vietnam has joined and implemented 17 free trade agreements with over 60 countries and territories, including new-generation FTAs such as the CPTPP, EVFTA, and UKVFTA.
Benefits of FTAs for Vietnamese businesses
Vietnamese businesses benefit from FTAs: Increased exports and easier access to international markets through free trade agreements
Free trade agreements (FTAs) have become a highlight in the wave of global economic integration, helping Vietnam achieve a new position on the international trade map. The impact of FTAs on Vietnamese businesses is evident in four key aspects:
1. Enhanced competitiveness
Free trade agreements (FTAs) are increasingly asserting their strategic role in promoting trade liberalization, expanding the market and attracting high-quality investment capital. For Vietnamese businesses operating in a globally competitive environment, upgrading product quality, optimizing production processes, and applying international-standard technologies are no longer optional - they are essential. The stringent requirements from major markets within the FTA bloc have become a powerful catalyst for Vietnamese enterprises to enhance labor productivity, improve competitiveness, and pursue sustainable development. These demands serve as a critical foundation for Vietnam to increase its value within the global supply chain and attract high-quality FDI, in alignment with the Government’s strategic direction.
2. Export market expansion
In recent years, Vietnam’s international trade has expanded at an impressive pace, setting many new records. In 2024 alone, total trade turnover reached nearly $786 billion, with exports contributing over $405 billion and creating a surplus of nearly $25 billion. Vietnam has maintained a trade surplus for nine consecutive years. Thanks to an average annual growth rate of 12.5%, Vietnam has risen into the group of the 20 largest trading economies in the world, currently ranking 17th globally.
Participation in numerous FTAs has enabled Vietnamese businesses to access and penetrate high demanding markets such as the EU and the US without being burdened by high tariffs. By diversifying export and import markets, Vietnamese goods have become more competitive internationally - further elevating the position of key export sectors such as agricultural products, seafood, and textiles.
3. Investment attraction and supply chain enhancement
In addition to promoting trade, FTAs serve as a crucial driver of foreign direct investment (FDI), enabling Vietnamese businesses to integrate more deeply into global supply chains. FDI companies from strategic partners are drawn to Vietnam not only by tax incentives but also by its strategic geographical location and abundant human resources. The presence of these multinational corporations contributes to a comprehensive upgrade of the value chain - from production technology to management processes. Notably, mergers and acquisitions (M&A) in sectors such as finance, banking, real estate, industry, logistics, retail, and agriculture are strongly attracting both direct and indirect investment from international investors.
4. Access to advanced technology and international production standards
Free trade agreements (FTAs) are powerful drivers of digital transformation, technology investment, and compliance with international quality standards. To meet the stringent rules of origin and technical specifications set forth by FTAs, businesses must invest in advanced technologies, streamline production processes, and build globally recognized, reputable brands. These efforts are essential not only for compliance but also for enhancing competitiveness on the international stage.
Vietnamese businesses benefit from FTAs: Increased exports and easier access to international markets through free trade agreements
While FTAs open up promising opportunities for investment and international business cooperation, they also present significant challenges. With the exception of a few ASEAN countries, most of Vietnam’s FTA partners possess far more advanced economies. Joining FTAs means Vietnamese enterprises must compete in a highly demanding global arena, where only those with strong foundation and competitive capabilities can thrive. In this context, businesses that fail to proactively upgrade their technologies, enhance product standards, and optimize production processes will struggle to meet the rigorous requirements of partner markets within the FTA network. Furthermore, human capital and the capacity to implement FTA commitments remain critical challenges. Businesses must invest in workforce training to meet international standards, while strengthening internal management and standardizing operations to align with the expectations of global clients and cross-border markets.
Solutions to enhance competitiveness for Vietnamese businesses in FTA
To fully capitalize on the opportunities presented by free trade agreements and strengthen their competitiveness in the international market, Vietnamese businesses must implement comprehensive strategies with a long-term vision.
Free trade agreements are an opportunity for Vietnam to integrate deeply with the world, but leveraging the benefits of FTAs depends on each business’s capabilities
1. Strengthen linkages and strategic cooperation
In the face of increasingly intense global competition, businesses within the same sector must proactively form strategic clusters and alliances to support each other across key areas such as capital, human resources, technology, markets, and operational experience. Collaborative models - such as joint ventures and strategic partnerships - help maximize the unique strengths of each enterprise while creating synergistic value for the entire industry.
Additionally, proactively seeking foreign partners for joint ventures, strategic collaborations, or mergers and acquisitions (M&A) brings opportunities to access advanced technology, global distribution networks, and enhance internal capabilities. This is a forward-looking strategy that empowers Vietnamese businesses to boost their competitiveness and secure a more resilient position within the international value chain.
2. Upgrade production capacity and build a brand
Vietnamese businesses must proactively improve equipment, production lines, and product design following international standards, ensuring output quality and competitiveness in the global market. At the same time, building a clear development path with a specific strategy and vision is a key factor that helps businesses identify their core strengths, seize market opportunities, and fully meet the strict requirements and commitments of the FTA.
3. Innovate management and apply technology
Adjusting business strategies, improving management models, and investing in modern technology play a crucial role in helping businesses optimize operations and enhance management efficiency. Digitizing the supply chain and setting up systems to monitor FTA compliance will help businesses respond flexibly to market changes while boosting competitiveness in the global business environment.
Comprehensive financial solutions from UOB Vietnam for businesses participating in free trade agreements
UOB Vietnam’s comprehensive financial solutions help Vietnamese businesses optimize capital and access international markets
1. Connecting with the Asian Network, expanding cross-border business opportunities
As Vietnam increasingly integrates through new-generation free trade agreements, Vietnamese businesses are facing many opportunities to expand their markets. With extensive expertise and as a member of the widespread international network of the UOB Group (over 500 offices in Asia, Europe, and North America), UOB Vietnam offers flexible and comprehensive financial solutions, acting as a bridge to international finance for businesses participating in free trade agreements (FTAs). In addition, with a diverse product ecosystem and a team of professional financial advisors, UOB Vietnam also provides FDI and M&A Advisory Services. We help businesses connect with investment funds and strategic partners, expanding opportunities to access capital on their journey into the regional value chain.
2. Foreign exchange services for FTA businesses
UOB Vietnam offers a comprehensive suite of solutions tailored to meet the diverse needs of enterprises, including exchange rate risk management against future fluctuations as well as ensuring cash flow optimization. Our products are designed for flexible deployment and cross-border settlement can be supported whenever it is required and feasible. This is a key advantage for businesses, enabling them to ensure accuracy financial planning, enhance operational efficiency, and expand their market presence.
3. Flexible and comprehensive trade finance solutions
For import trade partners, we offer services such as: Letters of Credit (L/C), Trust Receipts (TR), Invoice Financing (IL), Import Bill Collection (IC), Goods Receipt Guarantees.
For export trade partners, we offer services such as: Export Letter of Credit Advising (LA), Export Document Negotiation under LC, Export Letter of Credit Transfer (LT), Export Letter of Credit Confirmation, Export Collection of Payment (OC).
In addition, our Guarantees and Standby Letter of Credit services include: Bank Guarantees (BG), Standby Letters of Credit (SBLC).
4. Supply chain finance (FSCM) for FTA businesses
UOB Vietnam also provides Supply Chain Finance (FSCM) solutions for businesses. The FSCM solution is implemented on the UOB Infinity platform, enabling financing solutions that cover the entire supply chain process. The FSCM feature on UOB Infinity has already been launched in key markets such as Singapore, Malaysia, Indonesia, Thailand, Mainland China, and Hong Kong, and is now being rolled out in Vietnam – reinforcing UOB Vietnam’s leadership in supply chain financing across Greater China and ASEAN. Through this platform, we offer a comprehensive suite of FSCM services, covering everything from input material payments to production, sales, invoice issuance, and receivables management – all integrated within the platform.
Unlock the full potential of FTAs with our trade finance solutions from UOB Vietnam.
Conclusion
In a globally competitive environment, free trade agreements present both opportunities and challenges for Vietnamese businesses. As a strategic financial partner to thousands of enterprises across Asia, UOB Vietnam believes that FTAs offer a valuable pathway for Vietnamese businesses to succeed and assert their position in the global value chain. We are committed to continuing as a reliable companion on your journey of integration. Whether you’re a textile exporter, an agricultural business, or a large-scale FDI corporation, our team of experts is ready to assist.
Learn more investment information and free trade opportunities with UOB Vietnam.
Contact us for further support and consultation.
This article shall not be copied, distributed or used by any individual or organisation for whatever purpose. This article is given for reference only, non-binding, and is strictly for information only. The information contained in this article is based on certain assumptions, information and conditions available as at the date of the article and may be subject to change at any time without notice. You should consult your own professional advisers about the issues discussed in this article. Nothing in this article constitutes accounting, legal, regulatory, tax or other advice. This article is not intended as an offer, recommendation, solicitation, or advice to purchase or sell any investment product, securities or instruments.
United Overseas Bank (Vietnam) Limited and its employees have made reasonable efforts to ensure the accuracy and objectivity of the information contained in this article, however, no representation or warranty, whether express or implied, is given as to its accuracy, completeness and objectivity and accept no responsibility or liability for any error, inaccuracy, omission or any consequence or any loss or damage howsoever suffered by any person arising from any reliance on the views expressed and the information in this article.
