Vietnam and the EU expect the EVFTA will allow them to boost economic growth, stimulate trade and investment cooperation and create more job opportunities.
According to Mr. Tran Quoc Khanh, Deputy Minister of Industry and Trade, the EVFTA will create a boost for trade and investment between the two sides. Two-way trade increased from 6.3 billion USD in 2003 to 41.2 billion USD in 2015, making the EU one of the leading trade partners of Vietnam, Mr. Tran Quoc Khanh said.
Statistics of the Ministry of Industry and Trade showed that Vietnam’s exports revenue to the EU in 2015 were valued at 31 billion USD, while its import revenue was over 10 billion USD.
The EVFTA will help Vietnamese enterprises improve their competitiveness and gain more access to the EU markets, said George Berczely, Chairman of the Transportation and Logistics Sector Committee of the European Chamber of Commerce in Vietnam (EuroCham).
Mr. Mauro Petricione, Deputy Director General of the European Commission’s Directorate General for Trade, said that the EVFTA is an important step in the roadmap to intensify bilateral trade and investment.
However, Mr. Tran Quoc Khanh said that Vietnam has yet to fully tap its export potential to the EU. Vietnam’s export value to the EU accounts for only 0.75 percent of the EU’s total import value. To enjoy tariff and customs incentives under the deal, Vietnam needs to comply with its commitments regarding rules of origin and intellectual property rights, he added.
It is crucial for Vietnam to review and make amendments to its relevant laws and regulations in order to ensure consistency with the EVFTA commitments. As doing so may have a huge impact on domestic businesses as well as the country’s key sectors.
When the EVFTA comes into force in 2018, each industry will have its own tariff elimination schedule. However, enterprises should be preparing themselves from now with the equipment and materials required to form complete supply chains, especially those in the garment & textiles, and footwear sectors. Vietnamese enterprises should also be less dependent on imported materials and have a diverse supplier base to ensure their sustainable development.
Mr. Tran Quoc Khanh asked Vietnamese businesses to directly approach the distribution system, study European consumers’ taste, and listen to their product feedback in order to improve product quality.
Both Vietnam and the EU agreed to make efforts to complete the ratification to make the agreement effective in 2018.
The EU is also a big foreign direct investor in Viet Nam with 2,162 valid projects worth 38.4 billion USD. However, more reforms are needed to maintain and attract more EU’s investors to Vietnam.
The EuroCharm suggested Vietnam develop human resources via vocational training as well as increase productivity and improve capital distribution. Mr. Nicolas Audier from EuroCham said the EVFTA will provide simplified customs procedures with pre-arrival processing that will enable the release of goods on arrival, but it also requires both parties to maintain transparency and responsibility to the commitments.
