At a workshop in Brussels on Wednesday 14 September to promote the EU-Vietnam free trade agreement, negotiators, experts and representatives of European and Vietnamese circles explained the advantages of the free trade deal signed at the end of 2015 and whose signature and ratification process is now beginning. They highlighted the benefits for European retail.
"The EU retail sector has a double interest in Vietnam as it is our second largest source of fast-moving consumer goods after China and because of growing interest for investment in retail stores in Vietnam", said Pierre Gröning, trade policy director at the Foreign Trade Association. The scale of the potential gain for the sector is enormous. “For retail, the FTA with Vietnam is more important than TTIP [with the US], CETA [with Canada] and the Japan agreement combined,” said Gröning.
EU retailers currently import 8% of fast-moving consumer goods from Vietnam, a figure still well behind the 50% imported from China, but growing fast and set to receive a boost from the elimination of tariffs under the FTA, which would lower costs for importers and European consumers.
Among key export items, garments and textiles saw an increased turnover of $15.5 billion, up 4.2% year-on-year in the first eight months of 2016, and footwear ($8.6 billion, up 8.1%). EU clothing imports from Vietnam increased by 3.2% in 2015. Given the sensitivity of the sector, the full elimination of tariffs will be staged over seven years.
Rules of origin conditions for garments will require the use of fabrics produced in Vietnam, with the only exception being of fabrics produced in South Korea, another FTA partner of the EU (with which an FTA has been in force since 2011). The EU and Vietnam signed a free-trade agreement in December 2015 (see EUROPE 11444) the second FTA between the EU and an ASEAN nation (following the agreement with Singapore in 2012) and the first with an intermediate-income country. EU-Vietnam trade exceeded €45 billion in 2015 and is expected to grow this year. (Original version in French by Emmanuel Hagry)