09:16 | 09/12/2015 Trade
The free trade agreement between the European Union and Vietnam (EVFTA) is expected to push Vietnam’s exports into the demanding EU market, helping the country become industrialised and modernised by 2020, an official said.
Illustrative photo (Source:VNA)
In October 2010, Prime Minister Nguyen Tan Dung and the then President of the European Commission Jose Manuel Barroso agreed on the launch of EVFTA negotiations after the two sides completed technical work, said Trinh Minh Anh, Deputy Head of the office of the Vietnamese Government’s inter-sectoral steering committee for global economic integration.
The FTA talks officially began on June 26, 2012 and concluded on December 2, 2015. They went through 14 official sessions and a number of mid-term meetings between the two sides’ ministers, heads of delegations and technical groups.
Anh said the EVFTA is a comprehensive, high-quality agreement that will benefit both Vietnam and the EU. It also conforms to World Trade Organisation regulations.
The pact covers trade in goods, rules of origin, customs and trade facilitation, sanitary and phytosanitary measures, technical barriers in trade, trade in services, investment, trade remedies, competition, State-owned enterprises, Government procurement, intellectual property, sustainable development, cooperation and capacity building, and legal and institutional issues, he noted.
When the deal takes effect, the EU will remove import duties on 85.6 percent of goods, equivalent to 70.3 percent of Vietnam’s export revenue to the EU. After seven years, the EU will eliminate 99.2 percent of import tariffs, accounting for 99.7 percent of Vietnam’s exports.
For the remaining 0.3 percent of Vietnam’s export value to the EU, the grouping pledges to grant the country tariff quotas, in which the import tax will be reduced to zero.
The bloc vows to lift all import tariffs on key Vietnamese export commodities like textiles and garment, footwear and aquatic products (except for canned tuna and fish balls) within seven years of the pact’s effective date.
The EU will also give considerable quotas on processed, unprocessed and fragrant rice hailing from Vietnam, the official said, adding that rice imported under those quotas will benefit from zero percent duties.
Other products to benefit from the EVFTA include honey, fruit, vegetables, handbags, suitcases, ceramics, glass products, automobiles, motorcycles, wine, beer, pork and chicken.
Anh said over 99 percent of the tariffs on goods traded between the two sides will be eradicated under the deal, paving the way for strong export commodities. Vietnam will also able to access EU countries’ large-scale, cutting-edge production technologies.
Opportunities are always accompanied by challenges, the official stressed, describing sanitary and technical regulations as the EU’s biggest barriers for Vietnam. He also warned of a possible increase in commercial and antidumping lawsuits.
He delineated that when tariff barriers are lifted in accordance with the FTA, other barriers and trade remedies are likely to be erected to protect the EU’s domestic production and business.
Anh suggested Vietnamese companies closely follow the deal so as to design effective business plans and enhance competitiveness./.