The European Union (EU) and Vietnam reached an agreement in principle for a free-trade agreement (FTA) after nearly three years of intense negotiations. All important issues of the EU - Vietnam Free Trade Agreement (EVFTA) were agreed on and the two sides reached a mutually beneficial and balanced package.
Speaking at a press conference in Hanoi on August 4, Vietnamese Industry and Trade Minister Vu Huy Hoang said, with the level of commitments agreed, EVFTA is a comprehensive trade accord of high quality and with balanced benefits for both Vietnam and the EU. EVFTA was initiated and concluded when Vietnam - EU bilateral relations increasingly thrived, particularly in economy and trade. The typical feature in the export and import structure between Vietnam and the EU is a strong complement; thus, EVFTA is expected to bring a very positive impact on both Vietnam and the EU, especially economic benefits.
He added, “The typical feature in the export and import structure between Vietnam and the EU is strongly complementary and little direct confronting and competing.”
In 2014, the bilateral trade revenue exceeded US$36.8 billion, up 9 per cent against the previous year. Vietnam’s exports accounted for nearly US$28 billion while the EU took nearly US$9 billion. Vietnam’s key exports to the EU included footwear, apparel, coffee, furniture and seafood. The EU is also a big investor in Vietnam. By the end of 2014, 23 out of 28 EU member states invested in more than 2,000 projects with a combined registered capital of over US$37 billion in Vietnam. EU investors registered to invest in most important fields of Vietnam like manufacturing, construction, services and other sectors.
According to information from the European Commission in Brussels, EU Trade Commissioner Cecilia Malmstrom said, "The agreement creates a newer, better and more modern model for FTAs between the EU and developing countries and establishes a good standard for trade ties between the EU and Southeast Asian nations as a whole.”
“About 31 million jobs in Europe depend on exports, so having easier access to a growing and fast developing market of 90 million consumers like Vietnam is very good news. Meanwhile, Vietnam’s exporters will see wider doors to the EU for their products, giving an important boost to the Vietnamese economy. Both sides have worked extremely hard in the past few months to achieve this breakthrough,” she said.
Vietnam and the EU will remove over 99 per cent of tax lines and reduce tariffs on the remainder. This is considered the highest preferential treatment Vietnam has obtained with FTAs signed so far.
Regarding investment, both sides agreed to guarantee an opener and more transparent environment for each other. Thus, EVFTA will promote high-quality investment inflows from EU and other partners to Vietnam. With the EU’s investment development scale and potential, Vietnam will become an entrepôt centre which connects EU’s trade and investment activities in the region. This will promote economic restructuring process and growth model transformation towards Vietnam’s desired positive directions.
The commitments relating to investment, liberalisation of trade in services, government procurement, intellectual property protection and other aspects will also open up opportunities for the two sides to approach each others' markets and ensure overall benefit balance. Furthermore, this agreement also requires Vietnam to adjust some legal provisions. However, these adjustments are basically consistent with its orientations on administrative reform and growth model transformation and expected to bring back positive results in the long run.
During their EVFTA negotiations, Vietnam and the EU also agreed on the framework for cooperation programmes and capacity building for areas of mutual interests. This framework will help our country build a legal system, support the implementation of FTA commitments, and enhance the competitiveness of small and medium enterprises towards the ultimate goal of increasing bilateral trade and investment activities on the basis of mutual benefit.
Finally, the signing of an FTA with a highly developed partner like the EU will open up many opportunities for Vietnam to access modern technologies, learn management skills, improve working skills, create more jobs for workers and stabilise social security for our country.
The two sides agreed to push up the process, settle some remaining technical issues and finalise the legal text to officially sign the FTA this year.
Huong Ly
Vietnamese
