Vietnam's gross domestic product (GDP) may expand 15 percent and its exports to the European Union (EU) may rise by 30-40 percent when the Vietnam - EU Free Trade Agreement (FTA) is signed. Vietnamese businesses are eager to enjoy advantages that the Vietnam - EU FTA, expected to be concluded by the end of 2014, will bring.
The EU, with 28 member countries, is now the world's largest economy with a GDP of US$18 trillion, accounting for 22 percent of global GDP. EU countries had invested in more than 1,400 projects valued at US$18 billion in Vietnam as of the end of 2013. In 2013, the bloc invested US$656 million, ranking sixth among countries and territories investing in Vietnam in the year.
Maylis Labayle, Advocacy Manager of European Chamber of Commerce in Vietnam (Eurocham), said two-way trade between Vietnam and the EU has been rising sharply, reaching EUR26.6 billion in 2013. Vietnam ran a trade surplus of EUR$16 billion in the year, a huge advantage to grasp export opportunities when the FTA is signed.
Another benefit for Vietnamese exporters when the trade pact is signed is in technology transfer and training support, which will enhance the competitiveness of Vietnamese products in the EU market, she added. The Vietnam - EU FTA will provide a fresh impetus for Vietnam to sign the Trans-Pacific Partnership Agreement (TPP).
The Vietnam - EU FTA is designed to address such issues as tariff and non-tariff barriers, legislation, services, public procurement, intellectual property rights and sustainable development. The adoption of the FTA will send a positive signal to the EU business community that they will be welcomed.
Mr Ta Hoang Linh, Deputy Director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said “At present, just 42 percent of Vietnamese goods enjoy the EU Generalized System of Preferences (GSP). However, when the Vietnam - EU FTA is signed, at least 90 percent of Vietnamese goods will be granted zero tax.”
Mr Nguyen Manh Dung, Head of Processing Committee under the Agro-Forestry, Seafood Processing and Salt Industry Department, the Ministry of Agriculture and Rural Development, said there is a high likelihood that Vietnam’s exports will climb 30-40 percent. Fresh fruits, rice and seafood are expected to make strong leaps because of good privileges.
When the FTA takes effect, Vietnam’s competitive advantages will not only be price, but also product quality. To set foot on the EU market, Vietnam’s goods must pass complex quality control regulations and standards. Besides, Vietnamese companies must comply with transparency and consumer protection regulations.
For that reason, they should update information on FTA negotiations, regulations on certificates of origin, and devise plans to join the regional supply chain. In addition, they should learn more about technical standards and consumer habits to fully tap export opportunities.
Source: VCCI