Experts and industry insiders share their thoughts with VET on the newly-signed FTA with the EU.
After three years and 14 formal negotiation sessions, on December 2 in Brussels the Minister of Industry and Trade Vu Huy Hoang and the European Trade Commissioner Cecilia Malmstrom signed a joint statement officially concluding negotiations over the EU-Vietnam Free Trade Agreement (EVFTA).
The agreement is of high quality, complete, and balanced in terms of interests, in which the EU and Vietnam have pledged to abolish over 99 per cent of import duties. Vietnam will liberalize its tariff regime over a ten-year period and the EU over a seven-year period.
The opportunities presented by the FTA are accompanied by great challenges, in particular the strict non-tariff barriers that remain a persistent concern of exporters in Vietnam.
How can enterprises and State management agencies adapt to this high-quality agreement? After the joint statement was signed VET sought an answer from experts and industry insiders.
Formulating strategic action plans
Mr. Bui Huy Son, Director of the EU-MUTRAP project, Head of the Trade Promotion Agency at the Ministry of Industry and Trade
This is an important time for Vietnam to enhance its competitive capacity to identify the key to success at home and abroad. In particular, reform of the economic system and policies to facilitate trade is a major concern for the government in preparing the implementation of the agreement.
Officially concluding negotiations over the EVFTA and other important FTAs will boost and enrich trade promotion activities in Vietnam as many potential markets have emerged for the country. Regarding the EU, the Trade Promotion Agency at the Ministry of Industry and Trade has brought trade promotion activities into sharp focus as this market is Vietnam’s second-largest trading partner and fifth-largest investor.
When the EVFTA comes into effect Vietnamese commodities exported to the EU will be entitled to tariff exemptions, enhancing their price competitiveness. In order to maintain competitiveness we need to focus more on quality to ensure that products meet EU standards and regulations.
Trade promotion activities should be associated with product branding strategies to improve goods quality, as such tasks not only help major distributors in the EU know about Vietnamese goods but allow for an easier approach to consumers.
Take the initiative in all situations
Mr. Nguyen Mai, Chairman of the Vietnam Association of Foreign Invested Enterprises
Vietnam has experienced 20 years of regional integration (entering ASEAN in July 1995, signing the US-Vietnam Bilateral Trade Agreement in 2001, among others), achieving success in addressing the challenges to liberalizing trade.
Although a number of domestic enterprises are small-scale they have also been positive. I believe that most companies have gathered information on the trade agreements Vietnam has signed to date to prepare for when these come into effect.
I also understand that there are persistent challenges. The challenges presented by the EVFTA, however, are not as complex as those faced when Vietnam joined ASEAN and the WTO and signed the BTA.
I think that improving competitiveness and appreciating technological innovation and human resources are general approaches and not linked to the unique situation of each business. Therefore, instead of teaching enterprises what they already know, we should give them what they need to know.
Based on my experience, Vietnamese enterprises should be provided with useful information in a timely manner on each market to actively handle all situations.
Enterprises in all business lines confront particular problems, so each company, business association, and State management agency needs to study and exchange information to identify feasible solutions for each enterprise as well as the industry as a whole. They should also work together to resolve all problems.
The experience from integration has demonstrated that trade agreements have a positive impact on the process of creating institutions and laws in Vietnam to meet international rules and regulations. This has led to the business and investment climates being frequently improved. The content of the EVFTA will accelerate the process of perfecting institutions and laws.
Opportunities won’t automatically become benefits