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
percent, but garments have an 11.7 percent tariff, seafood, 10.8
percent, and footwear, 12.4 percent.
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 USD, and Vietnam’s exports of the items, 2.37 billion USD.
Under the FTA, tariffs on garments and textiles will be
slashed from 11.7 percent to zero percent, 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 USD, representing 17.7 percent of the
nation’s total export turnover.
The EU purchases 7.7 percent of
Vietnam-made products. Vietnam’s trade surplus with the EU was 11.5
billion USD and 14.9 billion USD with the US.-VNA