Financial Times reports on Vietnam-EU free trade deal

 
The Vietnam-European Union (EU) Free Trade Agreement (FTA) was finalised earlier this month, yet textiles remain a sticking point as EU negotiators fear China will use Vietnam as a backdoor for cheap textile imports into the EU, United Kingdom-based Financial Times reported.

The FTA has opened up one of Asia’s fastest-developing economies and a market of more than 90 million consumers to European companies, the newspaper said in an article titled “Brussels seals trade accord with Vietnam” on August 4.

The paper cited the International Monetary Fund (IMF)’s forecast that Vietnam’s economy will continue to grow over the next five years thanks to strong exports, young population and an increasing focus on technology.

More than 31 million jobs in Europe depend on exports, making easier access to Vietnam’s market great news for the EU, particularly European clothing, footwear and sportswear firms who will benefit from the slashed tariffs on goods made in their Vietnamese factories, EU Trade Commissioner Cecilia Malmstrom was quoted as saying.

The deal, which is still pending approval from the EU parliament, will remove 99 percent of tariffs between Europe and Vietnam over the next few decades, the article noted.

Trade between the two sides exceeded 28 billion EUR last year. Of the figure, the EU imported 22 billion EUR worth of commodities from Vietnam and is now Vietnam’s second largest trade partner after China.

Worrying that China will use Vietnam as a conduit to flood EU markets, the EU has introduced strict “rules of origin” safeguards to ensure that raw materials from China will undergo required workmanship in Vietnam before they can be re-exported to Europe.

The EU believed that the FTA would allow its companies to bid for major public contracts such as roads and ports in Vietnam and open doors for service sectors such as banking and insurance.-VNA