Since establishing diplomatic ties on November 28, 1990, the relationship between Vietnam and the European Union (EU) has developed strongly and well. Today, EU has become an important partner of Vietnam in many fields.

Leaders of both sides always attach great importance to strengthening multifaceted co-operation in line with potential and capacity. Recently, the relationship between Vietnam and some EU members, such as the UK and Spain has been raised to the level of a strategic partnership.

Vietnam is the first country in Southeast Asia to have a general strategy for cooperation with the EU and to include the EU’s role in its external policies to create an equal partnership and long-lasting and comprehensive co-operation for peace and development.

At a recent seminar on Vietnam-EU economic co-operative prospects in 2011-2015 with vision to 2020, Deputy Minister of Foreign Affairs Bui Thanh Son said that the prospects for cooperation between Vietnam and EU in the next 5-10 years are very bright and favourable for some significant reasons, such as the important economic position of Vietnam and the region. Developing ties with Vietnam will help the EU promote and foster connections in Southeast Asia.

Son said other EU members want to strengthen ties with Vietnam, especially since Vietnam assumed the position as a non-permanent member of the UN Security Council in 2008-2009 and the ASEAN presidency in 2010. 

Ambassador of the EU Delegation to Vietnam, Sean Doyle, also affirmed that Vietnam plays a strategic role in the region and is an important partner of the EU. EU member countries praised Vietnam’s role and position in the region and the world and hope to strengthen ties with Vietnam in the future.

Leading trade partner

Deputy Minister of Industry and Trade Tran Quoc Khanh said that 20 years after establishing diplomatic ties, bilateral trade cooperation has achieved significant progress and the EU has quickly become Vietnam’s leading economic partner.

Two-way trade turnover increased from US$1.5 billion in 1995 to a record high of US$16.2 billion in 2008, surpassing a set target of US$15 billion for 2010. In 2009 it still reached US$15.2 billion, despite the global economic crisis.

Vietnam exported US$7.8 billion to the EU in the first nine months of this year, a year-on-year increase of 13 percent, while it imported US$5 billion, up 26.2 percent. The EU is a major market for Vietnam’s key exports, such as garments, seafood, footwear, coffee and wood products. Vietnam mainly imports machinery, equipment, pharmaceuticals, steel, chemicals, optical equipment and means of transport from EU. Vietnam always has a surplus in the bilateral trade balance with the EU.

Big investors

As of October 20, 2010, the EU is a leading investor in Vietnam with 1,036 projects worth nearly US$16 billion.

EU investors have also helped create new sectors and products through high-technology.

Currently, major EU groups are operating efficiently in Vietnam, including Shell and BP (UK), Siemens and Daimler (Germany), and Alcatel and Total Elf Fina (France). EU investors are also keen on services for retail, telecommunications, finance, and leasing office space.

The EU is also a big donor to Vietnam in key fields of health care, education, culture, environmental protection, economic transition, administration reform and poverty reduction.

From 1993 to 2009, EU provided nearly US$10 billion ODA to Vietnam, nearly US$5 billion of which have been disbursed and it committed to provide US$1.05 billion to Vietnam in 2010.

Cooperation prospects

Deputy Minister of Industry and Trade Tran Quoc Khanh said the PCA signed on October 4, 2010, creates a new framework for comprehensive and long-term relationships between Vietnam and the EU. The PCA will help the two sides make full use of that comparative advantages. Many other EU’s strengths such as mechanics, manufacturing, transport, chemicals, pharmaceuticals and high added value services are what Vietnam needs, and Vietnam’s strengths such as material rubber, handicrafts, footwear, garments, seafood, coffee and pepper, can meet the EU’s import demands.

Particularly, the PCA will provide a firm foundation for a future FTA which the two sides hope to discuss soon. Signing FTA will open more opportunities for economic cooperation on both sides. Vietnamese businesses would be able to access EU markets easily and Vietnam’s investment and business environment is becoming more attractive to EU investors.

Ambassador Sean Doyle said the EU will continue to be an important partner of Vietnam in the next few years and hopes to become more important when an FTA is signed.