EVFTA to be signed in 2014 (28/3)
28/03/2013 - 15 Lượt xem
EVFTA
negotiations began on June 26, 2012 in Brussels, Belgium. It is
considered a comprehensive bilateral agreement that is suitable to the
principles of the World Trade Organization (WTO) and benefits both
sides. EVFTA will cover fields such as trade in goods, trade in
services, investment and other fields of interest to Vietnam and the EU.
The agreement has been discussed in two rounds of negotiations. The
third negotiation round will start on April 22 in Hanoi and is expected
to get all pending problems resolved so that the agreement can be signed
as soon as possible.
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In
2012, the EU moved ahead of the US to become the largest export market
of Vietnam with Vietnamese exports to the EU reaching US$20.3 billion,
up 22.5 percent compared with 2011 and accounting for 17.7 percent of
Vietnam's total export value.
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After
the EVFTA is signed and takes effect, more than 90 tax lines currently
applied to Vietnamese export products will be immediately or gradually
reduced to zero percent. For example, the 12.4 percent tax rate
currently applied to leather and footwear products will be reduced to
zero percent, leading to an estimated increase of 10-20 percent in the
export value each year. This will create favorable conditions for
Vietnamese goods to compete with foreign products of the same categories
in the EU market. However, when Vietnamese exports to the EU increase,
domestic businesses will have to get ready prepared to cope with
anti-dumping lawsuits. Moreover, when Vietnamese exports to the EU
increase thanks to lower taxes, the EU will also export more to Vietnam.
This will benefit Vietnamese consumers because they can buy European
products at reasonable prices, but for businesses, this will be a
challenge leading to a decline in their sales on the domestic market. If
they fail in competition, domestic businesses will have to reduce
production or even close. Despite this challenge, in the long term, a
greater presence of high-quality European products and services in the
Vietnamese market will create a motive force for domestic businesses to
improve their competitiveness.
Major
Vietnamese exports to the EU include products related to
labor-intensive sectors while the EU exports to Vietnam mostly
mechanical products, steam boilers, airplanes, pharmaceuticals, electric
equipment and means of travel. Therefore, Vietnam and the EU complement
but do not compete with each other in bilateral trade. This means a
bilateral free trade agreement will benefit both sides in the future.
After
the EVFTA is signed, Foreign Direct Investment (FDI) flows from the EU
into Vietnam will increase, bringing domestic businesses more
cooperation opportunities and creating more jobs for Vietnamese workers.
The EU side will be interested in fields such as auto, electronics and
high technology, machinery, wine and brandy, processed food,
pharmaceuticals, financial services, telecommunications, shipping,
healthcare, education and distribution. These are the fields where
Vietnam prioritizes investment. The EVFTA will help Vietnam attract more
investment and promote its development. For the EU, signing this
agreement will be a preparatory step towards its access to the
Association of South East Asian Nations (ASEAN) market. The EVFTA will
strengthen foreign investor trust in the business environment in
Vietnam. According to the European Chamber of Commerce in Vietnam
(EuroCham), 50 percent of EU investment in the country concentrates on
production and manufacturing and the other half covers real estate and
services; for the past five years, the investment environment in Vietnam
has shown positive changes, creating favorable conditions for investors
to carry out their projects.
After
Vietnam signs a free trade agreement with the EU, domestic businesses
will have to cope with more technical (non-tariff) barriers from the EU
side, for example strict regulations on quality and safety of goods,
environmental protection, use of manpower, intellectual property
protection, and anti-dumping measures. The EU can amend regulations on
raw materials, the origin of goods or export restrictions and
regulations on production inputs and technologies. Many experts share
the opinion that a free trade agreement usually takes effect without any
time limit and so it will be necessary to create a specific roadmap for
getting the EVFTA updated and adjusted in the future. When negotiating
the EVFTA, the Government must pay attention to the commitments on the
origin of goods, the localization rate, the regional value content and
the deadlines for tariff cutting.
At
a meeting with Vietnamese Prime Minister Nguyen Tan Dung and EU Trade
Commissioner Karel De Gucht in the framework of the 19th ASEAN Economic
Ministers' Retreat, the two sides expressed the belief that EVFTA
negotiations could end in 2014. They finalized a list of matters which
must be resolved latest by the end of this year. In the forthcoming
third negotiation round, the two sides will discuss matters related to
goods, services and public purchases./.
Source: VEN
Source: VEN
