The removal of import tariffs within the framework of the free trade agreement (FTA) with the EU will create better opportunities for Vietnam than for its rivals in the European Union market, according to chief of the consultants group of the EU Multilateral Trade Assistance Project Claudio Dordi.
He said that the country’s exports will increase and it will enjoy lower taxes on technology and high-quality materials from the EU. In the meantime, the EU will export quality services, improving Vietnamese businesses’ long-term competitiveness, he added.
At present, Vietnam exports five staples: footwear, garments and textiles, coffee, seafood and wooden furniture to the EU. The current tariffs applied on Vietnam’s goods stand at around 4.1 per cent, but garments have an 11.7 per cent tariff, seafood, 10.8 per cent, and footwear, 12.4 per cent.
With 27 members and around 500 million people, the EU is the largest importer of garments and textiles in the world, making up half of the world’s import value. The bloc’s 2013 import value of garments and textiles is expected to hit $234.2 billion, and Vietnam’s exports of the items, $2.37 billion.
Under the FTA, tariffs on garments and textiles will be slashed from 11.7 per cent to zero per cent, therefore facilitating the sector’s growth.
However, garment and textile businesses said the Government should pay attention to the principles of origin and the time period for two-way tariff cut during the negotiation.
Regarding the fisheries sector, Secretary General of the Vietnam Association of Seafood Exporter and Producers (VASEP) Truong Dinh Hoe said that the FTA should help the sector abide by sanitary and phytosanitary (SPS) measures and market access.
The EU is an important market for Vietnam, he said, adding that the eradication of tariffs on the majority of export items will create favourable conditions for Vietnam to compete against its rivals.
According to Director of the Ho Chi Minh City Chapter of the Vietnam Chamber of Commerce and Industry Vo Tan Thanh, the agreement will help improve the business environment and facilitate direct investment and business activities from the EU and other nations in Vietnam.
Head of the Ministry of Trade’s Asia-Pacific Market Department Bui Huy Son, who is also Director of the EU-MUTRAP project, said the EU is Vietnam’s leading partner in economics, trade and investment.
The FTA is proceeding to the third round of negotiation and the process is expected to finish in 2014.
He emphasised the necessity for businesses and sectors to contribute their opinions to the FTA negotiations as it is not only in their interest, but also necessary to the negotiations.
The General Statistics Office said the EU became Vietnam’s largest importer in 2012 with revenues of $20.3 billion, representing 17.7 per cent of the nation’s total export turnover.
The EU purchases 7.7 per cent of Vietnam-made products. Vietnam’s trade surplus with the EU was $11.5 billion and $14.9 billion with the US.
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