(VOVworld) – Vietnam and the EU completed negotiations for a free trade agreement on Tuesday after 3 years and 14 rounds of talks. VOV comments on new prospects for Vietnam-EU cooperation.
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.
Opportunities 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.