The European Union (EU) and Vietnam have today launched negotiations toward a free trade agreement, so that this country becomes the third in Southeast Asia to open talks with the EU to liberalize their trade relations.
The European Commissioner for Trade, Karel De Gucht and Minister of Industry and Trade of Vietnam, Vu Huy Hoang, officially opened in Brussels on start of negotiations, said the European Commission in a statement.
The two sides will seek a comprehensive settlement covering tariff and non-tariff and other commitments in trade-related aspects such as procurement, regulatory issues, competition, services and sustainable development.
“The potential is enormous for both sides,” he said in the note De Gucht, who said the first round of negotiations should take place “just after the summer holidays.”
He recalled that Vietnam is the third member of the Association of Southeast Asian Nations (ASEAN) with which the individual EU opens trade negotiations after Singapore and Malaysia.
“Our door remains open. We will continue our contacts with other member countries of ASEAN, including Indonesia, Philippines and Thailand,” said the commissioner.
The EU and Vietnam signed a partnership and cooperation agreement in 2010 as a first step in establishing economic links and political links, and start negotiating a free trade agreement marks a new step to deepen that relationship, said the Commission.
Vietnam is the fifth largest EU trading partner within ASEAN, and is ranked number 35 in the total EU trade, while the European bloc is the third largest Asian trade partner after China and the U.S. .
In 2011, EU imports from Vietnam amounted to EUR 12,800 million, while European exports to that country amounted to 5,200 million euros, according to the European Commission.
The EU mainly exports high-tech products (including machinery and electrical equipment, aircraft, vehicles, pharmaceuticals, iron and steel), while Vietnam is focusing its exports of footwear, clothing and textiles, coffee, seafood and leather furniture.
The EU is one of the largest foreign investors in Vietnam, with investments worth about 1,800 million dollars in 2011, representing over 12% of foreign direct investment in the country, according to Vietnamese statistics.
The ten ASEAN countries, together, are the third largest EU trade partner outside Europe with bilateral trade of goods and services stands at 175,000 million euros annually.
In 2007, the Council agreed to launch negotiations on an FTA from region to region with the ASEAN countries, but this process was halted in 2009.
Thus, in December of that year, the Council decided to advance the negotiations to liberalize trade with ASEAN countries on a bilateral basis with a view to preserving the “strategic goal” to achieve an FTA between regions where possible .