EU trade deal may result in growing Vietnam trade deficits
VOV.VN - As part of a continuing effort to support European companies gain access to the Vietnam market, the EU-Vietnam Business Network (EVBN) organized a recent dialogue in Ho Chi Minh City.
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The EVBN is comprised of 19 EU companies from the nine countries of Belgium, Bulgaria, France, Lithuania, Italy, Ireland, Poland, Portugal and the UK. EVBN receives its financial funding from the EU Delegation to Vietnam and the EU Ministry of Foreign Affairs.
The dialogue featured high profile speakers from various EU ministries including the EU Delegation, Ministry of Industry & Trade, Ministry of Agriculture & Rural Development, Ministry of Science & Technology and Ministry of Health, Ministry of Finance as well as representatives from EU member state embassies.
In addition, a large number of Vietnam governmental officials, local businesses, non-governmental organizations and experts in diverse prospective fields were in attendance.
The dialogue was a follow-up to similar ones held subsequent to the launch of the EuroCham Whitebook earlier this year on March 2 and was a valuable opportunity to promote the collaboration between EU and Vietnam in the context of the EU-Vietnam Free Trade Agreement.
Following the EuroCham Sector Committee presentation on regulatory issues and recommendations, EU companies were provided a chance to raise their concerns related to market access during an interactive and fruitful open discussion with representatives from the Ministry of Industry and Trade, Ministry of Health, Ministry of Science & Technology and Ministry of Finance.
The dialogue also addressed key impacts of the EU-Vietnam Free Trade Agreement (EVFTA) on the business communities both in the EU and Vietnam and the readiness of the Vietnam government in preparing for implementing the EVFTA.
Among the many speakers was Miss Miriam Garcia Ferrer, head of the trade section of the EU Delegation to Vietnam, who along with other leaders plays an instrumental role in preparing for implementing the agreement.
Other speakers included Mr Le Trieu Dung, deputy director general of Multilateral Trade Policy Department under the Ministry of Industry and Trade who discussed the changes brought about by the EVFTA and what need be done to prepare for implementing the agreement.
The presentations were followed by a stimulating and constructive panel discussion where an update and recommendation towards the realization of the Vietnam government commitments executed under the EVFTA were openly discussed.
A significant area of discussion was with regard to the free trade agreement and the likelihood that Vietnam local businesses stand to lose their trade advantage and surplus they have enjoyed with the EU over the past 10 plus years.
According to statistics of the General Department of Vietnam Customs for 2015, which were cited by Miss Ferrer, Vietnam exports reached US$30.9 billion for which Vietnam enjoyed a trade surplus.
However, after the free trade agreement is fully implemented the current trade surplus will most likely turn into a trade deficit as more and more EU businesses migrate to operate their companies in Vietnam.
The bottom line is that Vietnam is a choice location of EU investors, and as a result more companies will likely migrate here making it more difficult for local companies to compete, unless they can up their game and become more competitive.
The areas Vietnam companies are weakest in competing said Miss Ferrer, are those related to quality, food hygiene and safety— for which the EU requirements are some of the strictest in the world.
