At a meeting to review the bilateral collaboration and discuss ways to boost the ties between Vietnam and EU in Hanoi, PM Phuc emphasized that the EU is one of Vietnam’s top strategic partners.
Vietnam’s footwear exports to the EU is expected to rise significantly next time
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However, Phuc pointed out some factors that hinder two-way trade like the “yellow card” issued by the European Commission for Vietnamese seafood.
To further promote the ties, PM Phuc required ministries and agencies to focus on improving Vietnam’s business environment and streamlining administrative procedures in a bid to further facilitate trade and investment links with the EU.
He also urged ministries and agencies to work with the EU side to speed up the signing and ratification of the EU-Vietnam Free Trade Agreement (EVFTA) within this year in order to strengthen and broaden trade and investment cooperation between the two sides.
According to many experts, the EVFTA, which has been described as the most ambitious deal of its type ever concluded between the EU and a developing country, will have a positive impact on both Vietnam and the EU, with the most significant being the economic impact.
Not only will it eliminate over 99 percent of customs duties on goods, it will also open up Vietnamese services markets to EU companies and strengthen protection of EU investments in the country.
According to European Commission figures, the agreement could boost Vietnam’s booming economy by as much as 15 percent of GDP, with Vietnamese exports, especially tropical agricultural products, seafood, textiles, footwear, furniture, to Europe growing by over one third.
For the EU, the agreement is an important stepping stone to a wider EU-south-east Asia trade deal with focus on products such as machinery, equipment and means of transport.
Assessing the impact of the EVFTA on the Vietnamese economy, especially the export of Vietnamese goods to the EU, Truong Dinh Tuyen, former Minister of Trade, said that the tariff reduction will create new impetus for Vietnam's export to the EU market. Notably, the EVFTA is of great importance for the development of Vietnam's economy as the United States withdraws from the Trans-Pacific Strategic Economic Partnership (TPP).
In addition to trade, the EVFTA is also expected to contribute significantly to boosting high-quality investment flows from the EU to Vietnam thanks to its commitment in ensuring a more open and transparent investment and business environment.
According to Tuyen, EU currently consists of 28 members, which are already the top investors in Vietnam. With broad market commitments for investment in manufacturing and services sectors, and bound by commitments to protect intellectual property, the EVFTA will create a new motive for attracting high-tech investment of European companies to Vietnam.
Besides, experts said that with the scale and potential investment development of the EU, Vietnam has the opportunity to become a transshipment area for trade and investment of the EU in the region.
However, under the EVFTA, Vietnamese enterprises will also have to face with challenges, such as the competitive pressure on the domestic market, the compliance with EU’s rules of origin as well as strict standards and regulations on sanitary and safety.
