Being considered as a comprehensive trade agreement and having high feasibility, the EU-Vietnam Free Trade Agreement (EVFTA) is expected to bring Vietnam to a new position in ASEAN.
According to some experts in the EU, in the context of fluctuations in the world economic and political situation, especially since the US President signed to withdraw from the TPP, the EVFTA has become the biggest hope for Vietnam thanks to the feasibility in practice.
Mr. Francisco Fontan, Ambassador of the EU to Vietnam says, the EU is conducting negotiations with some ASEAN countries to bring chances to expand its markets, in which, the negotiations with Singapore and Vietnam have been successfully completed. The EU always considers Vietnam as a reliable partner in business in ASEAN. Vietnam’s economy is promising, and the country has contributed greatly to the security and political situation in ASEAN.
“With the newly-signed FTA, both Vietnam and the EU will have to face many challenges to take advantages of the Agreement. However, Vietnam is very dynamic and creative in adapting to new requirements, and the EU is willing to support Vietnam in the process of implementing the FTA to bring the best results for both parties”, Mr. Franciso said.
Commenting about Vietnam’s advantages in ASEAN, Dr. Le Anh Tuan, Deputy General Director of Dragon Capital says that Vietnam has had many advantages to compete with other countries in ASEAN with a high proportion of working-age population and rapid development in the middle class. Besides, Vietnam’s productivity is constantly increasing. Vietnam has had many opportunities to attract foreign investment and had big potential in the services sector as well as the size of the market. Over 2 years, even though Vietnam’s growth has been lower than before, it has been stable and better in quality.
Analyzing the impact on the specific sectors, Mr. Chris Humphrey, Executive Director at EU-ASEAN Business Council says, in the field of manufacturing motor vehicles, Vietnam has the strength in the market share of motorcycle production thanks to huge demand. In the automotive industry in Vietnam, because of low domestic content, it does not get benefit of the tax rate. However, Vietnam has chances to export automotive components. In order to take opportunities of the FTA, Vietnam’s enterprises must produce automotive components to participate in the production supply chain of motor vehicles and promote the domestic content for motorcycle production.
In the textile, footwear industries, Mr. Bill Watson, General Manager of Coats also says, though Vietnam has had its strength in the exports of two industries, the domestic consumption has been limited. The domestic market of Vietnam is dominated by China, and Thailand due to the weakness in raw and auxiliary materials. Participarting in the FTAs will help to expand the domestic market of textile and footwear industries of Vietnam.
Besides, when the EVFTA comes into force, the potential to export textile and footwear products to the EU is very big. Now, Vietnam’s market share in the EU is lower than China, however, if Vietnam only wins 1% market share of China, the export volume of Vietnam will increase by 10%. Participating in the FTA will bring opportunities for Vietnam to import good machinery and equipment from the EU to the improve labor productivity and product quality. However, the EU is also a hard market, thus, in order to promote export as well as meet the standards of technology, environment, product safety, we must enhance competitiveness of enterprises and confirm the brand of made in Vietnam in the hearts of EU consumers.