The Vietnam-EU Free Trade Agreement (FTA), expected to be signed by October this year, would likely bring “win-win” opportunities of success for both sides’ business circles, according to experts at the business forum held recently in southern Ho Chi Minh (HCM) City.
According to Jean-Jacques Bouflet, minister-counsellor and head of the Trade and Economic section of the EU delegation to Vietnam, the EU continued to be the most important market for many key exports of Vietnam.
Vietnamese exports to the EU currently enjoy the EU’s Generalized System of Preferences (GSP), which provides developing countries preferential access to the EU market through reduced tariffs.
However, preferential tariffs under GSP are unstable since GSP is subject to revision every 3 yrs, local Vietnam News daily reported Wednesday.
The EU official said it is high time for Vietnam to find a more predictable and stable legal framework for bilateral commercial trade, as the country has achieved a certain level of strong competitiveness in overseas market.
“An FTA is definitely an answer for this as it is a preferential access arrangement for Vietnamese products contractually guaranteed by treaty,” he said, adding that it would enable Vietnamese firms to enjoy lower export duties than that offered by GSP when exporting to the EU because, under the FTA, tariffs on most Vietnamese products exported to the EU would gradually drop to zero.
The bi-lateral FTA is forecast to have a wider impact, including an increase in the flow of quality investment from Europe, acceleration of shared expertise and transfer of advanced Green technology, and the creation of more jobs and better incomes for the Vietnamese people.
So far, the 2 sides had completed seven rounds of negotiation for the bilateral FTA, and the next round is scheduled next month. Both the EU and Vietnamese negotiators have targeted the conclusion of the FTA by October.
Other delegates at the forum said that to enjoy benefits of the FTA, local companies need to be aware of technical barriers to trade imposed by the EU and increase investment to improve product quality.
Frank Juettner, general director of TUV Rheinland Vietnam, said that the EU had many trade regulations to protect human health and safety, animal and plant life, and health and the environment. They include REACH, the European Community Regulation on chemicals and their safe use, FLEGT or Forest Law Enforcement, Governance and Trade aiming to reduce illegal logging, and IUU, the regulation against illegal fishing.
Dang Hoang Hai, head of the Vietnamese Ministry of Industry and Trade’s European Market Department, advised domestic firms to work directly with, and export their products to, EU supermarkets, because if their products can enter EU supermarket chains, they can enter other distribution channels there.
According to the Vietnam Chamber of Commerce and Industry (VCCI) in HCM City, the EU had surpassed the United States in Y 2012 to become Vietnam’s largest export market and the 2nd largest trading partner of Vietnam.
In Y 2013, Vietnam-EU bilateral trade reached US$ 33.6-B Y-Y increase of 16%, of which Vietnam’s exports accounted for US$24.4-B.
The EU is 1 of the biggest investors in Vietnam, with 1,401 investment projects and total registered capital of US$18.02-B in various sectors, including industry, construction and services.
Vietnam mainly exports apparel, footwear, Coffee, furniture and seafood to the EU, while the EU exports machinery, medicine, aircraft, equipment and vehicles.