Vietnam-EU Free Trade Agreement Negotiations Continue
Jan. 23 – On January 16, the Multilateral Trade Assistance Project (MUTRAP) and the Danang Branch of the Vietnam Chamber of Commerce and Industry (VCCI) held a seminar to discuss the contents of the Vietnam-European Union (EU) Free Trade Agreement (FTA). The seminar’s purpose was to assist Vietnamese enterprises in gaining a clearer understanding of the impact of the FTA, and to clarify the key opportunities and challenges that the FTA will create.
In attendance at the seminar were representatives from the Vietnamese Ministry of Industry and Trade, craft associations, and major businesses that have trade ties with EU member countries. In addition, consulting experts from the European Trade Policy and Investment Support Project were also present.
The EU is one of Vietnam’s top economic, trade and investment partners. It has grown to become its largest export market with a total turnover estimated at US$20.3 billion in 2012 (up 22 percent since 2011). This accounts for 17.7 percent of Vietnam’s overall exports. The FTA aims to slash at least 90 percent of tariff lines on Vietnamese exports to the EU.
Seminar participants were briefed on the opportunities and challenges that Vietnam would face. Speaking on the advantages of the Vietnam-EU FTA, the Head of Project Consulting of MUTRAP, Claudio Dordi, said that there is much to gain. Lower tariffs would not only strengthen exports to the EU market, it would also allow Vietnam to import goods from the EU at lower prices.
On the other hand, Vietnamese enterprises will have to cope with new challenges arising from the FTA. A zero percent import tax on most European goods, the opening up of the service market, and increased transparency in business and investment management will be key challenges.
“Vietnam is forced to shift its legal framework towards the protection of intellectual property rights… in a sufficient and effective way,” added the Vice President of the Forest Products Association of Binh Dinh, Nguyen Van Tham.
The first round of Vietnam-EU FTA negotiations officially started in October 2012. The second round began in Belgium on January 22 of this year. Discussions will be held over four days, and will focus on the exchange of goods and services, investments, intellectual property, labor, and the environment.
The next three rounds of negotiations will be held later this year.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
You can stay up to date with the latest business and investment trends across Vietnam by subscribing to The Vietnam Advantage, our complimentary update service featuring news, commentary, guides, and multimedia resources.
An Introduction to Doing Business in Vietnam
This new 32-page report touches on everything you need to know about doing business in Vietnam, and is now available as a complimentary PDF download on the Asia Briefing Bookstore.