Chief negotiators from Vietnam and the EU agreed that in this round of talks, the two sides managed to ensure a balance between Vietnamese and EU interests despite some pending issues relating to the service market and government procurement. Though the signing of a FTA between Vietnam and the European Union involves several technical and legal procedures, it is likely that it will be completed by the end of this year. This will open a new era for bilateral cooperation.

Ambitious free trade area

Vietnam and the EU began the first round of negotiations for a Free Trade Agreement in August, 2012. After nearly 2 years and 6 rounds of negotiations, tough issues have been discussed and a balance of the interests of both sides has been ensured. Francs Jensen is Chief of the EU delegation to Vietnam: “The key here is to find what we call the right development ambition. If we start the FTA, we should make sure that it has enough bidding, enough content which is worth the effort. The EU side recognizes fully that Vietnam is still a poor country, your industry entrepreneurs are developing and we will take it into account during the negotiations, during the development ambition that we are trying to define. So that should be a concern outside here yet”.

Vietnam is the third ASEAN country to hold negotiations for a Free Trade Agreement with the EU and the EU is the first major partner with whome Vietnam has held FTA negotiations. The signing of a FTA agreement will create opportunities for both sides. The FTA will help Vietnam eliminate all tariff and non-tariff barriers and create favorable conditions for Vietnam’s export and economic growth in general. Currently, only 42% of Vietnam’s exports to the EU enjoy zero tariffs. This is expected to reach 90% if a FTA is signed. Through the FTA negotiations with Vietnam, the EU will soon recognize Vietnam’s market status which will help Vietnam in its struggles against trade protections such as anti-dumping taxes. A FTA will also help EU investors enjoy a more transparent environment. Ambassador Francs Jensen said: “The FTA, clearly as we see it, is the interest of Vietnam and also the interest of the EU. We are good partners and we should be able to do more. We should be able to be more ambitious in our relationship and we should not be overly distracted by very short term or very punctual issues that we have on one or the other’s economy. The FTA is not for the next year only, or the year after only. The FTA is something that will dominate the relationship for the many years to come”.

Prospects for bilateral cooperation

Though the EU’s economy did not fully recover in 2013, two-way trade between Vietnam and EU reached 30 billion USD. Major Vietnamese exports to the EU include leather footwear, garments, textiles, coffee, fish, and leather furniture. Vietnam imported from the EU machineries, equipment, aircraft, automobiles, pharmaceuticals and steel. Vietnamese businesses will enjoy lots of export opportunities once a FTA is signed. Vietnamese Ambassador to Belgium Pham Sanh Chau said: “Two-way trade increased 24% annually in the last two years. The European Union has maintained its technology transfer and ODA for Vietnam. Many EU countries have cut down or eliminated ODA for Vietnam but the EU’s overall ODA for Vietnam has increased. The relationship between Vietnam and the EU has gone beyond that of a a donor and aid recipient. A FTA will help boost Vietnam’s exports to the European Union”.

Since the Lisbon Treaty was signed in 2009, the EU has been building a federal state with 28 members. In its external policy, the EU is paying more attention to ASEAN, including Vietnam.

Since 2013, EU member countries have recovered from the economic crisis to achieve positive growth and generate more jobs. The bloc is expected to achieve a higher growth rate this year. On the basis of their fine development, the two sides hope to sign a FTA this year to enhance their trade and investment growth.