Brussels, 19/02/2003 (Agence Europe) - As we have previously indicated, the European Commission and Vietnam agreed on 15 February a mutually beneficial agreement on trade. The agreement gives Vietnam an increase in textile and clothing quotas worth € 200 m a year in exchange of significant tariff reductions by Vietnam for the textile and clothing sector. In a press statement published on Monday, the European Commission indicated that it would accomplish the necessary approaches for adoption and implementation of the agreement.
The main components of the agreement planned for the years 2003, 2004 and 2005 are as follows:
The EU will increase its textile and clothing quotas it applies to Vietnam between 50% for the most sensitive categories (such as trousers or shirts) and 75% (such as brassieres). The estimated value of these concessions is € 200 million for 2003 and € 225 million for 2004 and 2005. Under this agreement, total imports from Vietnam in the sector will increase by around a quarter, with the possibility of exceeding the € one billion mark for the first time.
Vietnam commits to reduce its customs duties for EU imports of textile and clothing products, progressively, to 20% for clothing, 12% for fabrics, 7% for yarns and 5 % for fibres in 2005 - or less than half the duties it applies at present. It has also agreed to improve the management of the granting of licences for exports of the interest to EU textile and clothing industry.
Vietnam and the EU commit not apply any non-tariff barriers in the textile and clothing sector, and for wines and spirits and ceramic tiles.
Vietnam will introduce a number of liberalisation measures in other sectors: From 1.1.2004 it will allow EU operators to undertake through joint ventures a list of sea cargo transport agency activities currently not permitted to non-Vietnamese firms. It will without delay issue an additional insurance brokerage licence to an EU firm. It will introduce from 1.1.2004 a tariff quota for the import of motorbikes and scooters of EU origin. It will reduce import tariffs on wines and spirits of EU origin to 80 % on 1.1.2004 and 70 % on 1.1.2005. It will take concrete and immediate steps to fulfil its commitments undertaken earlier regarding the elimination of minimum import prices for wines and spirits and ceramic tiles, the elimination of additional duties for ceramic tile imports and an expansion of the list of pharmaceutical products allowed for imports. It will apply a "non-discrimination" provision in particular in the banking and telecommunications sectors.
The agreement contains precise implementation provisions that subject the increase of EU textile quotas to prior fulfilment by Vietnam of its obligations under the agreement, and for the withdrawal of concessions in case Vietnam did not comply with its obligations.