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EU free-trade pact requires thorough preparation: Expert
Viet Nam should prepare thoroughly before signing the planned free trade agreement (FTA) with the EU as it is the biggest market for the country's exports, experts have said.
"A free trade agreement between Viet Nam and EU will boost bilateral trade and investment from the EU, but serious studies should be conducted to ensure that the country benefits and that we have proper solutions for the issues emerging from the FTA," said Prof Nguyen Mai, Chairman of Viet Nam Association of Foreign-Invested Enterprises (VAFIE).
Prof Mai spoke at a workshop held yesterday in HCM City by the EU-Viet Nam Multilateral Trade Assistance Project (MUTRAP III), VAFIE and the National Committee on International Economic Cooperation.
This would be the first bilateral FTA signed by Viet Nam. The six previously signed FTAs were multilateral, including ASEAN-China, ASEAN-Japan and ASEAN-India.
Prof Mai said the country was inexperienced in dealing with such an FTA, which is influenced by both economics and politics.
In addition, negotiations for the FTA after the post-financial crisis would be difficult because the government has focused on the domestic market economy, which at times needs protectionism, he added.
Prof Claudio Dordi, MUTRAP III's technical assistance team leader, said it was necessary that the Government identify several strategies to eliminate obstacles and trade barriers among partners.
"Viet Nam should expect the EU to lower tariffs on Vietnamese products, and Viet Nam should also lower tariffs to benefit from cheaper European imports of technology and high-quality materials," he said.
In this context, Vietnamese enterprises would become more competitive over the long-term, and the EU would likely increase investments in the country.
"The EU has different reasons to conclude an FTA with Viet Nam," Dordi said, adding that an FTA targets investments in ASEAN and other Asian countries and gives EU service-providers and investors more access to Asia.
Truong Dinh Tuyen, former minister of trade, said an overview of the Viet Nam-EU FTA could not yet be defined because the two parties had not entered into significant negotiations.
The EU should ensure that "a slow roadmap be created in opening trade or service markets, just like the World Trade Organisation (WTO) commitments, according to the principle of special treatment for developing economies like Viet Nam," he said. The EU's lower tariffs on goods imported from Viet Nam would help increase exports to EU, especially for goods that compete with China and countries that also have low import tariffs with the EU, Tuyen added.
He also emphasised that Vietnamese and EU-invested enterprises should be involved in the preparation of the Viet Nam-EU FTA negotiations.
Prof Mai said business associations as well as enterprises should also be included because the business community would be directly influenced by the FTA. In addition, negotiators do not fully understand each business sector.
Matthias Duehn, Managing Director of EuroCham in Viet Nam, said business association played a significant role in raising awareness of FTAs among enterprises and collecting private-sector input and expertise.
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