This is his second visit to Vietnam after the first in 2007.
Vietnam-EU diplomatic relations were officially established in 1990. The signing of the Partnership and Cooperation Agreement (PCA) and kick-starting of free trade agreement (EVFTA) negotiations has paved the way for both sides to propel relations forward.
On political relations, the two sides have maintained high-level exchange visits, including EU visits by Party General Secretary Nguyen Phu Trong in January 2013, Prime Minister Nguyen Tan Dung in October 2010, and Vietnam visits by European Council President Van Rompuy in November 2012 and EC Vice President and Foreign Policy Chief Catherine Ashton in August this year.
Vietnam has established strategic partnerships with six EU member states, namely the United Kingdom, Germany, Spain, the Netherlands, France, and Italy.
Trade is seen as an important pillar in the Vietnam-EU relations. The EU is one of Vietnam’s second biggest trading partners and the largest export market. From 2001-2013, bilateral trade turnover increased more than 7 fold from US$ 4.5 billion in 2001 to US$33.7 billion in 2013. In 2012, the EU first surpassed the US to become Vietnam’s largest export market.
Vietnam’s main EU export items include garment, footwear, coffee, seafood, furniture, electronics, consumer goods while its imports are machinery, spare parts, computers, electronics products and components, garment materials, pharmaceuticals, chemicals and chemical products and transport vehicles.
Major features of two-way trade between Vietnam and the EU are highly complementary with less competition. Vietnam has always enjoyed trade surplus to the EU, averaging US$3-5 billion over the past ten years, equivalent to 50% of export turnover. Vietnam’s export structure to the EU has shifted towards increasing the proportion of high-quality goods, safe food, and fine arts and handicrafts and reducing the proportion of average quality and raw agricultural products.
Regarding investments, as of June 2014, 23 out of 28 EU countries had invested in 1,471 Vietnam-based projects with total registered capital of US$18.38 billion. EU countries have run projects in most Vietnamese localities including Ho Chi Minh City with 538 projects capitalized at US$2.77 billion. Hanoi took the top spot with a total investment of US$3.06 billion from 341 projects followed by Ba Ria-Vung Tau, Quang Ninh and Dong Nai.
In terms of investment by Vietnamese businesses in the EU states, as of late June this year, Vietnam had 47 investment projects in 11 EU nations (Germany, the Netherlands, Poland, Czech Republic, Belgium, Sweden, the UK, Italy, France, Greece and Bulgaria) with a total registered capital of US$ 115 million. The opening of VietinBank branch in Frankfurt, Germany with total capitalization of US$50 million is Vietnam's biggest EU project.
The EU and its member states are the second largest bilateral donor and the largest non-refundable aid donor for Vietnam. The EU has committed EUR400 million for the country in the 2014-2020 period, 30% higher than the 2007-2013 period.
The two sides have actively maintained dialogues on human rights issues in the spirit of cooperation and mutual respect.
During the visit, the EC President is scheduled to meet with senior Vietnamese leaders to compared notes on issues of common concern as well as measures to enhance future relations.
