Identifying Opportunities from Vietnam - EU FTA

 

On March 3, 2011, the Ho Chi Minh City Branch of the Vietnam Chamber of Commerce and Industry (VCCI) hosted a workshop titled “Vietnam - EU FTA Negotiations: Opportunities and Challenges for Vietnam.”

Trade relations between Vietnam and the European Union (EU) have progressed powerfully and impressively in recent years. The EU - an economic zone with 27 member states - has become one of Vietnam’s most important trade partners. In 2010, the EU was the second largest export market of Vietnam and the fifth largest import market for the Southeast Asian nation. Meanwhile, though actually being a minor partner of the EU (ranking 31st in imports into EU and 41st in exports from EU), Vietnam has high potential with a rapidly growing economy, a young population with high demand for goods and services, and is an attractive and stable investment destination.

 

Mr Tran Huu Huynh, President of the Committee on International Trade Policies (CITP), VCCI, said: If the Vietnam - EU free trade agreement is signed, this will be a very good opportunity for businesses because they will have better access to high-tech imports from advanced countries.

 

He noted that exporters will gain many benefits from engaging in this playground. Vietnam can accelerate its major exports like footwear, textiles, electronics and seafood into this market. In the course of negotiations, we have to clarify the content of Vietnam and wisely choose favourable terms to promote current strengths and try to limit adverse effects, for which we have reasonable policies for what will be opened for them and what will be accepted with them.

 

Professor Claudio Dordi and Federico Lupo Pasine, MUTRAP III project experts, said that according to experiences from FTAs the EU signed with other countries, Vietnam will enjoy benefits. Specifically, the EU will slash import tariffs on Vietnamese goods; thus Vietnam can expand exports to this market. Vietnam cuts taxes and accesses cheaper technological products and high-quality materials from the EU. The EU will export high-quality products and services to Vietnam, thus its consumers will enjoy benefits and its businesses will increase competitive capacity in the long term. Besides, the EU will also invest more in Vietnam.

 

Mr Huynh agreed that if the signing is concluded, it will bring many advantages for businesses in both import and export, but how to take the opportunities and advantages depends on each business and industry. But, Mr Huynh said it is certain that when joining this playground Vietnam will have many big partners and its businesses can choose modes of competition, participation in global value chains or provide services.

 

Together with such advantages, businesses will have to face difficulties. Huynh analysed that after signing such agreements with developed countries, enterprises are subject to intense competition. But, they all understand what benefits the agreement brings.

 

This workshop was one of activities within the advocacy campaign on the EU-Vietnam Free Trade Agreement carried out by VCCI in the framework of the EU - Vietnam MUTRAP III (the Multilateral Trade Assistance Project, Phrase III), sponsored by the European Union. In addition to providing multidimensional information on the draft of the Vietnam - EU FTA, this was an opportunity for businesses to contribute opinions before the State officially starts negotiations. The provision of pros and cons will help us identify advantages and challenges, Huynh said. Thus, businesses should actively participate in providing valuable information for negotiators to make appropriate decisions.