Vietnam-EU trade pact under scrutiny

Participating State officials, business associations and research institutes discussed the possible effects of the pact on local major export commodities, such as agricultural produce, footwear and leather, and woodwork products.

According to the Vietnam Association of Leather and Footwear, Vietnam is the second biggest footwear exporter to the EU, which annually consumes some 2.8 billion pairs.

The removal of tariffs once the pact comes into effect will provide a huge potential for Vietnam to enlarge its share in the market, which is expected to double by the time the agreement is signed.

However, approximately 70 percent of Vietnamese exports are outsourced to foreign companies who will also follow the rising trend. This may lead to negligible profit increases and slow down domestic entrepreneurs, noted the association.

Vice Chairman of the Vietnam Timber and Forestry Product Association Nguyen Ton Quyen said local exporters’ proposal asking the EU to hold off on issuing new policies that could limit the export of Vietnamese woodwork products, was likely to be rejected.

Claudio Dordi, technical assistance team leader of the EU-MUTRAP, claimed that the free trade agreement will enable Vietnam to improve its mechanisms and legal systems for trade and customs as well as lessen tariff and non-tariff barriers.

The EU is currently Vietnam’s second biggest trade partner and the largest export destination for major trading commodities including footwear, apparel, seafood and agricultural produce./.