EVFTA inspires growth and reform

13:18 | 16/07/2016 Cooperation

(VEN) - The EU-Vietnam Free Trade Agreement (EVFTA) is an example of the great efforts Vietnam has made to balance imports and exports as well as to improve the business environment and promote institutional reforms.

evfta inspires growth and reform
Textiles and garments are among major Vietnamese exports to the EU

An impulse for trade and investment growth

At a recent workshop held by the Ministry of Industry and Trade in association with the EU Delegation to Vietnam and the European Trade Policy and Investment Support Project in Hanoi, Deputy Minister of Industry and Trade Tran Quoc Khanh said that over the past more than 10 years, trade and investment relations between Vietnam and the EU had shown great progress. Bilateral trade grew nearly sevenfold from US$6.3 billion in 2003 to US$41.2 billion in 2015, turning the EU into one of Vietnam’s leading trading partners and export markets. Last year, Vietnam exported nearly US$31 billion worth of goods to the EU and spent more than US$10 billion on imports from the EU.

Vietnamese and European imports and exports supplement each other. Vietnam exports to the EU textiles and garments, footwear, telephones and components, computers, agricultural products, and imports from the EU pharmaceuticals, machinery and equipment, transport means and spare parts. However, Vietnamese exports to the EU still account for a mere 0.75 percent of the total value of goods imported by the EU.

Promoting institutional reform

Deputy Minister Khanh added that just about 42 percent of Vietnamese exports to the EU currently enjoyed a zero-percent tax rate under the Generalized System of Preferences (GSP). The EVFTA can increase this to over 90 percent following a specific roadmap, meaning that US$28 billion worth of Vietnamese exports to the EU will be tax-free in the future.

With strong commitments covering a wide range of fields, the EVFTA is expected to create a new impulse for trade and investment between Vietnam and the EU.

Deputy Minister Khanh believed the EVFTA would open a lot of opportunities for Vietnamese businesses. The government will do its utmost to improve the business environment and modernize institutions in order to create favorable conditions for domestic and foreign investors. On their side, businesses need to pay greater attention to customer feedback so as to improve their products and increase exports. “Compared with other markets, the EU requires higher product quality. Moreover, European people pay great attention to the environment and consumer interests. Businesses should remember these things in order to boost exports to the EU,” Deputy Minister Khanh said.

Mauro Petriccione, Head of the EU’s delegation to EVFTA negotiations, said the FTA would open up the EU market but Vietnamese businesses needed to deeply understand the agreement to make the most of it. He affirmed the EU would create the best conditions for businesses of the two sides to access each other’s markets and expand cooperation.

To materialize the benefits that the EVFTA could bring, Vietnam and the EU agreed to promote the completion of the ratification process so that the agreement takes effect in 2018.

Nguyen Huong