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Nation set to ink new free trade agreement with EU
Viet Nam and the European Free Trade Association (EFTA) could be set to sign a free trade agreement (FTA) to boost the bilateral trade, says a report released on Mar. 8.
An FTA would hold significant potential to strengthen the economic relationship between Viet Nam and EFTA, the report by a Joint Study Group established August 2010 by Viet Nam's Ministry of Industry and Trade and the Ambassadors of the EFTA states (Iceland, Liechtenstein, Norway and Switzerland) said.
The Deputy Minister of Norway‘sDepartment of Industry and Trade, Halvard Ingebrigtsen, said the FTA signing was expected in July.
The report was an important step towards the comprehensive FTA that would cover trade in goods and services, investment, government procurement, intellectual property rights and competition.
At on Mar. 8's seminar, Ngo Chung Khanh, Director of the Multilateral Trade Policy Depart-ment's WTO Division pointed out the opportunities and challenges for Viet Nam in negotiating a future FTA with EFTA.
"Though EFTA is not a big economic union, it is highly dynamic and developed, making it a very promising market. Switzerland and Norway especially hold potential for Vietnamese exports," Khanh said.
The bilateral trade relation between Viet Nam and Switzerland is developing favourably with an equal balance of trade. Viet Nam meanwhile is looking for investments from Switzerland in many areas.
The FTA would create more opportunities for Viet Nam to increase its exports to EFTA countries, especially from its strongest industries of footwear, textile and garment, handicraft, furniture, seafood, tea, coffee, rubber, and vegetables.
The challenges would include the risk of trade vulnerability in the case of a global economic crisis or fluctuations; exposing Vietnamese companies to more competition from foreign product and service suppliers; and monitoring imports of goods without the protection of trade barriers.
Experts pointed out that Vietnamese exports to some countries strike a lot of barriers, especially agricultural goods.
Sveinung Roren, Deputy Director General of Norway's Ministry of Trade and Industry's Trade Policy Department said "the FTA would facilitate trade, for instance zero tariffs for industrial goods and tariff concessions on agricultural goods."
EFTA provides technical cooperation for its potential partner countries including capacity-building, training and transfer of know-how and strengthening relations.
With a total population of 13 million, EFTA has a GDP of nearly US$1,000 billion per year and is the EU's third biggest partner. It has signed FTAs with 31 countries and territories.
The EFTA's modern technology and resources in Viet Nam along with business projects and investment would create more jobs and better incomes for Vietnamese workers and increase tax revenue for the State, Nguyen Canh Cuong, Deputy Director of Viet Nam's Ministry of Industry and Trade's Department of European Market said.
Le Van Dao, Vice Chairman of Viet Nam Textile and Apparel Association said "the FTA would help domestic textile and garment businesses penetrate the EFTA market, which is linked with the EU, the main market of the industry."
So far, Viet Nam has signed FTAs with partners such as ASEAN, mainland China, South Korea, India, Australia and New Zealand.
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