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Nov 02, 2016 / 09:57

Swiss President hopes EFTA-Vietnam FTA to be soon signed

Swiss President Johann Schneider-Ammann has expressed his hope that the European Free Trade Association (EFTA) and Vietnam will conclude negotiations on a bilateral free trade agreement within the next few months despite certain difficulties at present.

Swiss President Johann Schneider-Ammann
Swiss President Johann Schneider-Ammann
The President said as a member of the EFTA, Switzerland expects the FTA will be a booster for trade between Vietnam and Switzerland as well as other European countries. According to him, the visit to Vietnam on October 11 by Minister of State for Economic Affairs Marie-Gabrielle Ineichen Fleisch demonstrated Switzerland’s interest in developing ties, particularly in commerce, with Vietnam.

President Schneider-Ammann noted that bilateral economic ties remain modest at the moment, with Swiss investment in Vietnam standing at nearly 2 billion USD in 99 projects. At the same time, he underlined development aid as a key component of bilateral cooperation during the past years.

He added that in the economic partnership with Vietnam, Switzerland will focus on helping Vietnam improve public finance management, the financial system’s capacity and small- and medium-sized enterprises’ access to capital. Priority will also be given to raising environmental standards, promoting the effective use of natural resources, clean production and sustainable development of trade, and bettering urban planning and public services.

Since 1992, Switzerland has provided 470 million USD in development aid, mostly grants, to Vietnam. Development will continue to be an important part of the Vietnam-Switzerland development cooperation strategy for the 2017-2020 period, which was announced during Minister of State for Economic Affairs Ineichen Freisch’s visit.

Under the strategy, Switzerland committed to providing 90 million CHF (92 million USD) of non-refundable ODA for Vietnam to implement joint projects in the three main areas – supporting the promotion of institution and economic policies, assisting the building of a competitive and effective private economic sector, and backing the sustainable urban development and climate change response.

In the time ahead, Switzerland continues to pay attention to further promoting economic cooperation with Vietnam and deepening the relationship between the two countries on the foundation of the political ties built over nearly half a century, President Schneider-Ammann stressed.

EVFTA will come into force from 2018, connecting Vietnam - one of ASEAN’s most dynamic manufacturing hubs with the EU – one of the world biggest markets with GDP of over 18 trillion USD, accounting for 22 percent of the world’s total GDP and a population of over 500 million people. 

Once the EVFTA agreement goes into effect, the EU will eliminate import duties on approximately 85.6 percent of its tariffs lines on Vietnamese products. After seven years, 99 percent of EU tariffs will be removed for Vietnamese products. Vietnamese textiles, footwear, and seafood products (except for canned tuna and fish balls) will incur no import duties within seven years after the agreement takes effect.

The EU is currently Vietnam’s second biggest export market and Vietnam is EU’s 11th biggest source of import. About 900 European enterprises have invested in Vietnam, making it the destination in South East Asia with the largest European business community. 

This relationship has huge potential for improvement under this important agreement. It can open for European exporters markets that have FTAs with ASEAN but not with the EU, such as China, India and Australia. Rules of origin are challenges but also opportunities. They give extra incentives to attract supporting industries into Vietnam, improving the supply chain and localisation rates.