An official FTA between Vietnam and EU is expected to come into being in autumn.
Vietnam and the EU reached an in-principle agreement on August 4 over a free trade agreement (FTA) after two and a half years of intense negotiations. “Mutual support is the outstanding point of the FTA between Vietnam and the EU,” Minister of Industry and Trade Vu Huy Hoang said. He gave the example of the agriculture sector, in which Vietnam will have favorable conditions to export rice and seafood to the EU while importing wheat and fruit.
Minister Hoang emphasized that both Vietnam and the EU believe that the potential to cooperate and develop between the two is enormous, bringing major benefits to investors and enterprises from both. “The FTA is comprehensive and balances the benefit of the two sides,” he added. “It includes opening up markets, commercial services and goods, government procurement, intellectual property, export taxes, and investment protection.”
The EU respects Vietnam’s economy is at a low level of development and so provides opportunities for it to improve its competitive capacity.
The ASEAN Economic Community (AEC) is expected to begin by the end of the year, creating a community of 600 million consumers with total GDP of over $2.6 trillion. There are other FTAs between Vietnam and Asian partners and FTAs between ASEAN and Asian partners. All are expected to make huge contributions to the development of and cooperation between Vietnam and its partners.
Head of the EU Delegation to Vietnam Mr. Franz Jessen also evaluated that the FTA will accelerate Vietnam’s trade. Even so, the EU and Vietnam still have to make efforts to resolve remaining issues in the FTA to achieve an official final deal soon.
Mr. Jessen also considered the FTA as a milestone to boost trade between the EU and ASEAN. He expects it will be a foundation for an FTA between the EU and ASEAN in the future.
The agreement is the first the EU has concluded with a developing country. As such, the ambitions and symmetrical liberalization agreed upon - with a transition period to allow Vietnam to adapt - breaks new ground compared to other EU agreements. It shows the shared conviction of the EU and Vietnam that trade is essential to growth, the creation of jobs, and sustainable development.
“We have a deal. This finely balanced agreement will boost trade with one of Asia’s most dynamic economies. It sets a new, better and modern model for free trade agreements between the EU and developing countries and establishes a good standard for the trade relationship between the EU and Southeast Asia as a whole.
Vietnam is a growing economy and once this agreement is up and running it will provide significant new opportunities for companies from both sides, by increasing market access for goods and services. Over 31 million jobs in Europe depend on exports, so having easier access to a growing and fast developing market like Vietnam, with its 90 million consumers, is great news. And Vietnam’s exporters will now get much easier access 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.”
EU Trade Commissioner Cecilia Malmstrom