Viet Nam Human Rights
EVFTA affirms Vietnam's human rights achievements
3/7/19
At the end, the EU-Vietnam Free Trade Agreement
(EVFTA) has been signed as an admittance of EU to Vietnam’s developments and
achievements through the past few years. In all achievements, human rights
record has gained many progresses in Vietnam.
EU and Vietnam have held many human rights dialogues
and cooperation programmes to enhance mutual understandings and acknowledges
between both sides. Now, not just EU, the international communities have
recognised Vietnam human rights record and developments in protecting and
promoting freedom of expression, press and religion. Singing EVFTA is a paying
reward for the Party, State and people of Vietnam. Let’s enjoy it as an
opportunity for Vietnam to confirm its prestige all over the world.
With a population of more than 500 million people
and a combined GDP of over US$15 trillion, accounting for about 22% of the
world's GDP, the EU is an extremely large market and also the largest exporter
and importer in the world with an annual foreign trade turnover of about US$3.8
trillion .
However, import and exports from and to Vietnam in
the EU only focus on several countries including Germany, France, the UK,
Netherlands and Italy. Thus, there remains huge potentials and opportunities
for Vietnamese enterprises to seize when EVFTA comes into effect as Vietnam has
strengths in tropical agricultural products, fisheries, textiles and garments,
footwear, and furniture.
General Secretary of the Vietnam Association of
Seafood Exporters and Producers (VASEP) Truong Dinh Hoe said that the EU is
committed to eliminate 50% of tariff lines imposed on fishery products except
for canned tuna and fish balls (equivalent to 840 tax lines with most of tax
rates from 6 to 22%) immediately after the EVFTA takes effect.
The remaining 50% of tax lines will be reduced to 0%
in three to seven years after the effectiveness of the trade deal.
Meanwhile, seafood export to the EU are still
growing impressively. Vietnam posted US$105.2 million worth of tra and basa fish
exports to the EU in the first five months of this year, up 31.5% compared to
the same period of 2018.
With tax incentives from EVFTA, the exports of tra and basa and
other seafood products, particularly shrimp to the EU will surely gain momentum
for strong growth. A seafood company in Sa Dec Industrial Park in Sa Dec city,
Dong Thap province said that its export revenue to the EU only accounts for 10%
of its total seafood export turnover of about US$90 million per year, noting
that the effectiveness of the EVFTA will create opportunities for exporters to
penetrate into this market. With preferential conditions from EVFTA, the
company will boost exports to the EU to diversify its market by not only
focusing on the Asian market.
Chairman of Board of Directors of TNG Investment and
Trading JSC Nguyen Van Thoi said that EVFTA is a very good opportunity for
textile and garment enterprises and taking advantage of such opportunities
depends on the capability of enterprises.
Enterprises who have made preparations for the trade
deal will meet the standards set out by the deal while enterprises that have
just approached the deal will have to wait about five to six years to take
advantage of opportunities.
Thoi said that TNG is currently cooperating with a
large EU customer, accounting for more than 40% of TNG’s production capacity as
the company has made preparations and could take advantage of the trade pact
immediately after its effectiveness.
The deal is not all roses
Like the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP), EVFTA offers an opportunity to expand the
market for a number of Vietnamese export products in addition to big challenges
for businesses. Participating countries can reduce tax rates but raise
non-tariff barriers and take more stringent controls, requiring enterprises to
meet higher standards on quality, food safety, environmental protection, energy
saving, and others.
Therefore, enterprises should actively learn the key
information about EVFTA and Vietnam's commitments, particularly on tariff
incentives, product quality, origin of goods, and others. Director of the WTO
Integration Centre under the Vietnam Chamber of Commerce and Industry (VCCI)
Nguyen Thi Thu Trang said that it is not easy to enjoy preferential tariff
treatment in EVFTA, especially for agricultural products.
Trang noted that commitments to EVFTA do not mean
granting export license to goods, nor do they eliminate technical barriers to
trade, traceability and food safety. In addition, integration will increase
competitive pressure from imported products while raising production costs and
costs on obeying rules on labour, environment, and others.
Expert on foreign economics Bui Kim Thuy said that
both CPTPP and EVFTA are new generation FTAs, but EVFTA has more stringent
regulations than CPTPP. Members of CPTPP can also hold many bilateral or
multilateral FTAs with other members. Therefore, enterprises may choose to
apply rules in bilateral FTAs or rules in CPTPP. For example, to export goods
to Japan, Vietnamese enterprises can apply provisions in CPTPP or in Vietnam –
Japan FTA or even in ASEAN – Japan FTA. It means that enterprises have many
options to enjoy preferential tariffs that are best suitable with their
shipment.
However, to export goods to the European markets,
enterprises must comply with only EVFTA without other options. In addition,
EVFTA regulates even more stringent rules than in CPTPP such as rules of origin
applied to shrimp products, an industry that Vietnam has attached great
importance to. Therefore, EVFTA is actually not all roses.
Acting General Director of Dong Tien JSC (Dovitec)
Nguyen Van Hoang said that the EU market currently accounts for about 80% of
the total export revenue of Dovitec. The number of orders and prices of
products are expected to increase soon but the company will have to face many
challenges and pressure from foreign firms, Hoang said. Thus, the State should
have strict supervision and management mechanisms to avoid unequal competition
in order to facilitate domestic enterprises, he noted.
The EU is a fastidious market that has strict
policies to protect consumers, thus Vietnam's export products to this market
must meet demanding requirements. To take full advantage of benefits from
EVFTA, businesses should strive to better themselves while developing new
strategies and solutions to building brands and creating high-value products
capable of competing with imported goods.
Furthermore, enterprises should improve their
competitiveness through innovating technological equipment, improving product
quality, and proactively approaching EU enterprises to learn and enhance the
qualification to penetrate into the EU market.
Co-chairman of the European Chamber of Commerce in
Vietnam (EuroCham) Nicolas Audier said that EVFTA will be the most important
FTA ever signed. Vietnam’s seafood and garments and textiles are export sectors
will benefit directly from this agreement while European cars, pharmaceuticals
and alcohol production will benefit mostly from the deal.
So far, the Netherlands and France have obtained
investment protection in Vietnam and with the rest of the European countries
also wishing to gain the same protection. The EuroCham now has about 1,000
members, therefore, when EVFTA is effective, a large amount of capital flow will
continue to flow into Vietnam. Nicolas Audier thinks that EVFTA not only makes
EU goods easily accessible to the Vietnamese market, but it will also be a
gateway for EU goods to penetrate the Asian market./.
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All comments [ 16 ]
The first benefit is a further expanding market and export opportunities for the goods of each side’s strengths. For Vietnam, the EU will eliminate 85.6% of the tariff lines, equivalent to 70.3% of Vietnam’s exports to this market, as soon as the agreement enters into force. Over the next seven years, the EU will eliminate duties on 99.7% of Vietnam’s exports while the remaining 0.3% will enjoy zero tariffs within the quotas set for them.
With this agreement, tariffs on nearly 100% of Vietnam’s exports to the EU will be eliminated within a short period of time.
This benefit is particularly significant as the EU is one of Vietnam’s two largest export markets.
The EVFTA is considered a new generation bilateral agreement – it contains important provisions for intellectual property (IP) rights, investment liberalization and sustainable development.
Vietnam is now the EU’s second most important trading partner among all ASEAN members – surpassing regional rivals Indonesia and Thailand, in recent years.
After three decades Vietnam has gained many achievements on promoting human rights and democracy.
For Vietnam, the tariff elimination will benefit key export industries, including the manufacturing of smartphones and electronic products, textiles, footwear and agricultural products, such as coffee.
The EVFTA will be a huge boost for Việt Nam's exports, helping diversify markets, especially agricultural and aquatic products as well as Vietnamese products which have competitive advantages.
Thanks to the deal, Vietnamese consumers will have more options,adding that products of Vietnam and the EU are supplementary.
Domestic businesses will have more chances to access European technologies, standards and management methods to raise productivity, quality and competitiveness.
European partners can transfer technologies or inject investments to help agricultural producers in developing countries to satisfy food safety requirements set by the EU.
This is an important political event which aims to strengthen the relationship between Vietnam and its partners and convey the message of a dynamic Vietnam that is a reliable and responsible partner in the international community, while continuing to improve the prestige and position of Vietnam.
The government has made a number of welcome legislative changes to prepare the ground for the smooth implementation of the EVFTA.
Without a doubt. The EVFTA represents an historic change in EU-Vietnam relations.
I think the EVFTA is very important to help Vietnamese products, services and goods be competitive, develop in the European market and be able to form value chains.
Vietnam is an attractive trade and investment destination for European companies, and will become even more so once the EVFTA is ratified and takes effect.
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