Tax-News.com | 01 June 2012
EU to negotiate FTA with Vietnam
by Ulrika Lomas, Brussels
Two months after a meeting between the European Trade Commissioner Karel De Gucht and the Vietnamese Minister for Industry and Trade Vu Huy Hoang, the European Council (EC) finally gave the green light on May 31 for the European Commission to start negotiations with Vietnam on a free trade agreement (FTA).
De Gucht and Huy Hoang had produced a scoping paper that covered the topics to be included in the future Vietnam-European Union (EU) FTA negotiations, and the completion of that preparatory work was an important stepping stone as it set out the framework for those negotiations.
Both sides agreed on ambitious targets for the areas to be covered in the upcoming FTA negotiations. They will cover a broad range of issues including elimination of import tariffs, trade in services, non-tariff barriers to trade (such as technical barriers or the rules on foodstuffs) and the trade aspects of rules relating to intellectual property and competition.
In 2007, the EC agreed to launch negotiations on a region-to-region FTA with the Association of Southeast Asian Nations (ASEAN), but these were put on hold in 2009. In December 2009, the EC decided to pursue free trade negotiations with ASEAN countries in a bilateral format, whilst preserving the strategic objective of a region-to-region FTA at a later date.
Vietnam will be the third ASEAN country to negotiate a free trade agreement with the EU; and talks are expected to start shortly. Negotiations are already underway with Singapore and Malaysia.
Vietnam is the EU’s fifth largest trading partner within ASEAN (and 35th out of the EU’s total trade), while the EU is Vietnam’s third largest trading partner (after China and the United States). The EU is also one of the largest investors in Vietnam - around USD1.8bn, which represents more than 12% of Vietnam’s total committed foreign direct investment.