Vietnam and the EU recently finished the legal review process for EVFTA and agreed on all contents of the Investment Protection Agreement. Two parties will submit these agreements to relevant authorities for further signing and subsequent ratification.
For Vietnam’s successful ratification and enforcement of EVFTA, a representative from EU's Delegation to Vietnam gave some recommendations.
More sustainable development is the goal of signing FTA
Vietnam and the European Union (EU) are considered as two non-competitive economies that complement each other through the traded commodities. The EU is exporting high-tech products to Vietnam while vice versa, Vietnam is exporting processed goods and agricultural products.
Miriam Garcia Ferrer, Head of Economics and Trade Section of the EU's Delegation to Vietnam, said that: "We are now actively supporting Vietnam's better economic development by promoting the development of manufacturing industries, more complex producing process to create more sustainable growth for Vietnam in the future. This is the goal of signing a free trade agreement (FTA)."
Moreover, when Vietnam is supported, its ability to attract investment from the EU will be higher because more and more EU businesses want to come to Vietnam and bring technology, expertise and knowledge.
"We always want to help Vietnam transform its economy and industries, enhance its image in the international market as well as help it get many opportunities in the EU market," said Miriam Garcia Ferrer.
Opportunities and challenges for both sides in EVFTA
Miriam Garcia Ferrer stressed that: "Vietnam will get more opportunities than quantified benefits."
Sharing the same point, Almut Roessner, Executive Director of EuroCham, said that: "The EVFTA will open up a lot of new opportunities for Vietnam's businesses both in trade and in investment. Vietnam can even further reduce its tariffs, eliminate trade barriers and protect investors."
The export to the EU is estimated to increase by around 50 per cent by 2020 and the import from the EU is estimated to increase by around 43 per cent, which is significant and makes EU's companies consider Vietnam as an attractive market.
Miriam Garcia Ferrer said that: "Both sides are almost ready to implement the FTA. The legal review has entered a final stage and this agreement is expected to be signed at the end of this year."
However, preparatory work needs to be started so that the first day the agreement takes effect, everything will be implemented smoothly.
Head of Economics and Trade Section of the EU's Delegation to Vietnam said that: "From a Vietnamese perspective, EU is a market having very high standards that Vietnamese businesses need to improve their capabilities as well as their internal competitiveness to meet."
This difficulty comes from the fact that Vietnam is relying much on raw materials and produces low added value products.
For the EU, although Vietnam has a good legal framework, enforcement has a problem. "From central to local levels, there are different ways of doing things and there are different ways between different agencies. This makes EU businesses quite lucrative to meet legal requirements. Besides, the long procedure and complex requirements make EU's companies go to many different agencies," said Miriam Garcia Ferrer.