Vietnam has become one of the first ASEAN country to conclude negotiation for a free trade agreement with EU.
Vietnam and the EU completed negotiations for a free trade agreement on the night of December 2, after 3 years and 14 rounds of talks, at the European Union headquarters in Brussels Capital, Belgium. Prime Minister Nguyen Tan Dung and EC President Jean-Claude Juncker had witnessed the signing of an official agreement to conclude FTA negotiation between Vietnam and the European Union (EU). Vietnam has become one of the first ASEAN country to conclude negotiations of free trade agreements with the EU an economic entity, specific politicians with 28 member states.
Negotiations for the EU-Vietnam FTA began on June 26, 2012. After a 14th round of negotiations on July 13 and July 14, 2015, Vietnamese Minister of Industry and Trade Vu Huy Hoang and EU Trade Commissioner Cecilia Malmstrom agreed to conclude the negotiations.
Vietnam-EU Free Trade Agreement concluded negotiation lasted 14 sessions over 5 years. This is a free trade agreement with high standard, comprehensive and balanced promises to expand the market for commercial exchange, especially of products and services. Both parties have the strength to complement each other; create equal and favorable environment for investment and trading businesses. Once approved, this agreement takes effect to open great opportunities for economic cooperation, especially trade development, enhanced competitiveness and value of Vietnamese goods. Europe is currently the largest export market of Vietnam with export turnover of nearly 31 billion dollars for 9 months of this year, of which Vietnam exported nearly $23 billion.
The FTA gives opportunity to increase goods exchanges and market expansion. Ms. Malmstrom rates the agreement with Vietnam above agreements the EU has signed with other developing nations because it sets a good standard for trade between EU countries and Southeast Asia. Under the agreement, tariffs on 65% of Vietnamese exports will be removed. Vietnam and the EU will remove almost all import tariffs, which will create greater access to service and investment markets. Minister of Industry and Trade Vu Huy Hoang said this is the most comprehensive commitment in any FTA Vietnam has signed: “The signing of the EVFTA will create opportunities to strengthen bilateral cooperation in trade, investment, imports, and exports. Once the agreement takes effect, Vietnam’s agricultural products, including vegetables, fruits, fishery, and rice will receive EU preferential tariffs. Vietnam will also facilitate EU exports of wheat, groceries, and husbandry products to Vietnam”.
The reduction of tariffs will increase Vietnam’s exports to the European Union by 30% to 40%. Garments, textiles, footwear, food processing, seafood and services are the sectors that will benefit the most from the FTA. The agreement will also contribute to expanding the Vietnamese market and boosting trade relations between Vietnam and the EU.
The FTA will play an important role in Vietnam- EU trade cooperation. Commitments to ensuring a more open business environment under the FTA will help increase the flow of high-quality investment from the EU and other partners into Vietnam. The EU’s development investment potential will help Vietnam become a hub connecting EU trade and investment activities in the region. This will accelerate Vietnam’s economic restructuring and growth model conversion.
The EVFTA framework will help Vietnam improve its legal system, support the implementation of commitments, and increase the competitiveness of SMEs towards the ultimate goal of promoting bilateral trade and investment activities for mutual benefit. Minister of Industry and Trade Vu Huy Hoang said: “The FTA will benefit Vietnam’s global integration, economic restructuring, and growth model renewal, and raise Vietnam’s status in the fields of global trade and investment.”
Once the FTA is signed, commitments to ensure an open, smooth trade and investment environment will attract resources from the EU and other countries to Vietnam. Franz Jessen, Ambassador, head of the EU’s delegation in Vietnam, said: “This agreement is an important milestone for the EU-ASEAN trade relations. After Singapore it’s the second bilingual talk that shows our ultimate goal of an ASEAN-EU region-to-region agreement. It’s constructive and forward-looking. And this agreement sets a new model to trade policy in developing countries.”
The Vietnamese and EU negotiating teams will continue to resolve pending technical issues and finalize the agreement. The draft agreement needs approval by the European Council and Parliament before the official signing scheduled for late this year.
Regarding import-export, the two sides’ strong commitments to market opening will open the door wider for various kinds of export products, especially those of their strengths such as Vietnam’s garment-textile, footwear, farm produce, seafood, and timber products and the EU’s machinery, equipments, automobile, alcoholic beverages, and some agricultural products.
Bilateral commitments to investment, liberalization of trade of services, Government procurement and intellectual property protection are expected to open up brilliant opportunities for the two sides to make inroads in each other’s market and ensure their balanced and overall benefits.
Vietnam and the EU will eliminate tariffs on over 99 percent of tariff lines. For the few remaining lines, the two sides will give each other a certain customs quota or partial reduction of customs tariff. In the field of investment, the two sides pledged to ensure a favourable, open business and investment environment, which is expected to boost the capital flows from the EU and other foreign partners into Vietnam.As such, Vietnam could become a centre to connect the EU’s trade and investment activities in ASEAN, which will promote the country’s process of economic restructuring and switching growth model in a positive direction.
Source: ktdt.vn
Key words: Vietnam-EU, declared, officially complete, FTA negotiation
