On Wednesday 14 September, European and Vietnamese negotiators, diplomats, experts and company CEOs summed up the benefits of the EU-Vietnam free trade agreement (concluded at the end of 2015) in terms of exports, growth, and job creation, as well as development in Vietnam. They called for its ratification at the beginning of 2017 and its entry into force in 2018.
During a workshop promoting the EU-Vietnam free trade agreement (FTA), Mauro Petriccione, the chief European negotiator said that "this is a time when people need to be reminded where their welfare comes from. It comes from trade. It comes in part from Vietnam...Europeans need to wake up, stop being spoiled and realise how much these [FTA] agreements contribute to their prosperity".
Business representatives echoed this assessment and BusinessEurope, the association representing employers in Europe, highlighted its continued commitment to fighting for free trade and tackling isolationism which can only lead to impoverishment.
The EU-Vietname FTA will eliminate 99.8% of duties on European products gradually over a 10-year period. It will apply to products such as cars, motorbikes, pharmaceuticals and alcoholic drinks, and will give tariff free access to a market of 90 million consumers in Vietnam, where the middle class is expected to reach 30 million by 2020. Goods produced in Vietnam will for their part benefit from duty-free access to the EU market.
“Vietnam is a very attractive destination for investment. Anything produced in Vietnam enjoys free market access in most of world”, Tran Quoc Khanh, the Vietnamese vice-minister for trade and industry, stated. He also pointed out that last year Vietnam concluded a Transpacific Trade Partnership (TTP) with the US and 10 other countries in the Asia-Pacific zone, which will become the biggest FTA in the world.
The EU-Vietnam FTA is also expected to boost Vietnam’s development, which is already considered an exceptional success story, with per capita income rocketing from US$100 in 1986 to US$2,100 in 2015, driven by export led growth, the Vietnamese Mission to the EU points out in a press release.
Concluded in December 2015 (see EUROPE 11444), the EU-Vietnam FTA is the EU’s second FTA with a country from the ASEAN bloc (after the FTA concluded with Singapore in 2012). It is the first FTA that the EU has ever concluded with a middle income country and covers access to markets for goods and services, public procurement and investment, non-tariff barriers, health and phytosanitary questions, intellectual property and customs cooperation.
It also includes a chapter on sustainable development, as well as another on investment protection, on the basis of the EU's reformed approach for a more transparent system for settling disputes between investors and states.
Bilateral trade between the EU and Vietnam was over €45 billion in 2015 and is set to increase this year. (Original version in French by Emmanuel Hagry)