Viet Nam makes progress on EU trade deal following Ha Noi forum

Viet Nam makes progress on EU trade deal following Ha Noi forum

Relations between Viet Nam and the European Union (EU) have gained more momentum with a significant increase in bilateral exchanges in recent months, said Jean-Jacques Bouflet, Trade Counsellor of the EU Delegation at a public dialogue forum held in Ha Noi yesterday.

The forum attracted representatives from ASEAN Member States, Vietnamese Government officials and stakeholder representatives from the private sector and social organisations. The meeting served as an oppoportunity for participants to share their concerns and aspirations about the deepening of their country's engagement with the EU ahead of the first round of bilateral Free Trade Agreement negotiations between the two sides expected to take place next month.

Director General of Viet Nam's Ministry of Trade and Industry's Multilateral Trade Policy Luong Hoang Thai said that based on the current relationship between the EU and ASEAN member states, a regional FTA or bilateral FTAs with the EU reflect the desire of the parties to achieve the ultimate goal of economic integration for delivering practical benefits to the private sector and stakeholders.

Important market

In 2011, Viet Nam was the fifth largest trading partner with the EU amongst the ASEAN countries, with a total bilateral trade amounting to EUR18 billion (US$23.4 billion), consisting of exports from Viet Nam to the EU worth EUR12.8 billion ($16.6 billion) and Viet Nam's import from the EU worth EUR5.2 billion ($6.76 billion).

In the first half of this year, the EU has become the second most important export market for Viet Nam, importing goods worth approximately EUR7.3 billion ($9.5 billion), accounting for 17.14 per cent of Viet Nam's total export revenue.

The EU's investment in Viet Nam totalled approximately US$1.76 billion last year, representing more than 12 per cent of Viet Nam's total committed FDI in 2011.

Apart from communicating the desire of ASEAN and the EU to forge closer economic relations, including the conclusion of bilateral FTAs, the discussion also covered issues such as regulatory reforms. Regulatory reform is likely to form a key component in the structural economic reforms needed to support longer-term economic growth in both Viet Nam and ASEAN, as well as for Southeast Asia to reap the full economic benefits from enhanced trade and investment engagement with the EU.

Deputy Director General of Viet Nam Industry and Trade Information Center Le Quoc Phuong said aside from the improvement in the institutional and legal systems, the economic legal framework of the country has also changed dramatically. In the area of trade, for example, reforms have been carried out to ensure Viet Nam's commitment in various international economic fora, including the gradual removal of tariff and non-tariff barriers.

Regulatory reforms should be the next step in the process of transformation from a centrally planned economic system to a more open and market-oriented approach that Viet Nam was currently pursuing, said Phuong.

Dao Ngoc Tien from the Foreign Trade University also agreed that the process of international economic integration has always encouraged Viet Nam to pursue regulatory reforms at domestic level. Whilst many of these internal reforms have been crucial in driving the process of economic development in the country, much is still needed to improve Viet Nam's competitiveness in the international market. An FTA with the EU could consequently enhance the drive for further regulatory reforms in the country.

At the forum, participants also emphasised the importance of a ‘bottom-up' approach to promote regulatory reform in Viet Nam. A representative from the Viet Nam Chambers of Commerce and Industry, Nguyen Thi Thu Trang, said the involvement of the private sector and the wider layers of society was imperative to ensure a relevant regulatory reform process in the country.

She also encouraged the Vietnamese private sector to provide constructive inputs in the forthcoming FTA negotiations that Viet Nam will pursue with the EU.

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