High hopes for signing Vietnam-EU FTA in 2014

The third round of FTA negotiations between Vietnam and the EU is scheduled to take place in Hanoi on April 22 after the two first rounds were concluded in Brussels, Belgium.

EU Trade Commissioner Karel de Gucht says the focus of the first two rounds was only on rules and regulations relating to public procurement, State-owned enterprises (SoEs), and the opening of markets.

EU- a major economic partner

After the first two rounds, Vietnam and the EU have outlined the huge challenges they face in exchanging information and negotiating on the area of goods and services.

The two sides have put forth issues that need to be settled this year so that the FTA can be signed next year.

Their current bilateral economic and trade ties must be placed within a firm legal framework in order to develop a free trade area in the near future.

In the first two months of this year, Vietnam’s export-import turnover with the European market hit more than US$5.66 billion, up 13 percent over the same period last year.

The Ministry of Industry and Trade (MoIT) European Market Department says that Vietnam’s exports to the European market in 2013 will hit US$24.8 billion, up 10.7 percent compared to the 2012 figure of US$22.4 billion, of which the country’s exports to the EU were estimated at US$22 billion, a 10-percent increase compared to the previous year’s figure (US$20 billion).

Vietnam’s export earnings from major European export markets included US$4.3 billion from Germany, US$2.7 billion from the Netherlands, US$2.1 billion from France and US$3 billion from the UK.

Vietnam plans to import US$12 billion of goods from the European market in 2013, accounting for 8.8 percent of its total import turnover.

How to overcome stumbling blocks

In the third round of negotiations, Vietnam and the EU will discuss a wide range of specific issues related to goods, services and public procurement.

To reach the FTA next year, the two sides need to manage themselves appropriately to overcome “the stumbling blocks” in their negotiations, such as the status of SoEs and the Vietnamese Government’s stance on public procurement.

Vietnam has renewed its economic policies for 27 years and the EU is expecting the country to make new breakthroughs in opening its market and gradually decrease State interference in business operations in order to create an equal and transparent playground for enterprises.

The upside is that some State-run businesses are being restructured under the Vietnamese Government’s framework for comprehensive economic reforms. And, to be sure, the restructuring process will make Vietnam become a true open economy that will capture EU attention as Commissioner de Gucht put it pointedly.

Vietnam - a pro-active member of ASEAN - will work together with ASEAN partners to kick-start negotiations on the Regional Comprehensive Economic Partnership (RCEP) in 2013 in the hope of finalizing all rounds of negotiations before 2016.

Karel de Gucht went on to say that, in addition to FTA negotiations with Vietnam, the EU is also negotiating FTAs with other ASEAN partners and is ready to facilitate FTA negotiations with all ASEAN member countries with a view to bringing practical benefits to both sides.