The first counselor and head of the economic and trade section of the EU Delegation to Vietnam made the urge at a conference on the impact of the EU-Vietnam FTA (EVFTA) on Vietnam’s economy and place in ASEAN in HCMC yesterday. The event was organized by the European Chamber of Commerce (EuroCham) in Vietnam in collaboration with the EU-Vietnam Business Network (EVBN).

 

The EVFTA is now in the process of legal review before the EU and Vietnam officially sign it. The trade pact is expected to come into force in 2018, paving the way for Vietnamese firms to boost exports to the European market of 500 million consumers owing to sharp tariff cuts and exemptions for many products.

 

However, Ferrer said tariff reduction is just one advantage and that Vietnamese businesses must meet technical and quality requirements of the EU if they want to bank on opportunities in the European market.   

 

She said Vietnamese firms still have time to study the requirements and improve their product quality before the EVFTA takes effect.

 

Provinces and cities should make preparations to make full use of the trade agreement to attract investors, experts said at the conference.

 

Ferrer said the conclusion of negotiations over the EVFTA would encourage other ASEAN countries to move on with a similar trade pact with the EU as they do not want to lose their competitive edge in trade with the EU. The EU has initiated FTA negotiations with a number of countries including the Philippines and Indonesia.

 

Bilateral FTAs with ASEAN countries will lay a foundation for the EU to reach an FTA with the whole bloc in the coming time, Ferrer said. She added the EVFTA could be a lesson for other ASEAN states to draw on.

 

ASEAN has captured the EU’s strong interest thanks to its population of 500 million. The EU had planned to work with ASEAN over an FTA in 2007 but later decided to proceed with a bilateral FTA with each member of the bloc, with negotiations with Singapore launched in 2010 and Vietnam in 2012. 

 

Speaking at the event, EU Ambassador to ASEAN Francisco Fontan highlighted the great momentum of EU-ASEAN relations generally and with Vietnam in particular. The EU has commenced a series of FTA negotiations with selected ASEAN countries in order to fully realize the market opportunities for EU companies.

 

“Among them, negotiations with Vietnam and Singapore have been successfully concluded. The EU and Vietnam remained two solid and reliable partners, opened for business, to ASEAN, and to the world,” Fontan said.

 

Michael Behrens, chairman of EuroCham in Vietnam, said in a statement that the EVFTA would have one year to enter into force.

 

“The potential of the EVFTA is clear, as its effective application can build on these good trade numbers between Europe and Vietnam and turn them into a long-lasting and ever progressing partnership, and ultimately into one of the most powerful intercontinental trade and investment corridors in the world. The EVFTA offers Vietnam the chance to link 500 million Europeans with more than 500 million ASEAN citizens, thus being at the center of a trade corridor for about one billion potential customers,” Behrens said.

 

Chris Humphrey, executive director of EU-ASEAN Business Council, pointed out Vietnam’s opportunity in ASEAN’s automotive industry with the EVFTA implementation given the country’s possession of low cost base, and increasing concentration of auto parts makers.

 

“The EVFTA provides Vietnam the potential to become one of the fastest growing car markets in the ASEAN region over the next 20 years as the Economist’s prediction. Yet challenges remain due to high levels of competition from Thailand and Indonesia or infrastructure and anti-congestion issues and so on urging Vietnam’s need to raise technical standards and increase local content for global export markets,” Humphrey said.