|The FTA will enable the country to make annual gains of about $1.5 billion by 2020 when export tariffs are cut.— Photo thanhtravietnam
HA NOI (VNS) — The Vietnam and EU Free Trade Agreement (FTA) would benefit Vietnamese enterprises, according to economic experts.
They said the FTA with the EU would improve Viet Nam's business climate thanks to a transparent legal framework after the negotiations.
The FTA with the EU would conform to World Trade Organisation (WTO) standards.
Viet Nam had made strong commitments to improve many domestic policies and regulations, said former minister of Industry and Trade Truong Dinh Tuyen in the Vietnam Economic Times.
The country's export turnover to the EU market wass predicted to increase by four per cent annually after the FTA is finalised.
The import-export tariff on most Vietnamese products exported to the EU would gradually drop to zero, creating an opportunity for Vietnamese enterprises.
However, to be able to enjoy the advantages of the FTA, domestic businesses needed to be fully aware of technical barriers to trade imposed by the EU relating to quality and points of origin for products.
Le Trieu Dung , Deputy Director General of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, said local producers needed to increase investment to improve product quality. The improvement of production would also have a positive effect in the long term.
According to Tran Ngoc Quan Deputy Director of the Ministry of Industry and Trade's European Market Department, Vietnamese businesses should make every effort to raise product quality to meet technical standards required by the EU market to raise their competitiveness and boost export turnover.
According to the General Statistics Office (GSO), in the first six months, the EU has taken the lead in Viet Nam's export markets with a total import turnover of $13.1 billion, an increase of 12.8 per cent over the same period last year.
Viet Nam mainly exports apparel, footwear, coffee and furniture and seafood to the EU, while the EU exports machinery, drugs, equipment, vehicles and raw materials for apparel, fertiliser and steel.
Le Ky Anh , an expert with the EU delegation to Viet Nam, said exporters would have more chances to export seafood, coffee and rice products after the FTA was signed.
Ngo Van Sinh, a senior official from the Agro-Forestry Fisheries Quality (NAFIQAD), said the EU was an important market for Viet Nam's fisheries sector. Since 2006, EU has surpassed the US and Japan to become Viet Nam's largest seafood export market.
The eighth round of FTA negotiation concluded on June 28, and both sides are now planning to finish the negotiations this October.
The FTA will enable the country to make annual gains of about $1.5 billion by 2020 when export tariffs are cut. The estimated increase in gross domestic product is about 2-2.5 per cent, and wages are estimated to improve by around 5 per cent.
Likewise, imports from the EU will increase by 25-35 per cent, reflecting the greater reduction in tariffs. — VNS