Nation increases ‘connectivity’

The European Union thought Viet Nam not only a partner but also an important gateway for its goods and services to the Asia-Pacific market, its ambassador in Ha Noi, Sean Doyle, said yesterday.

The EU had seen the growing “connectivity” within the region and wanted to build links based on a win-win situation, he told a seminar dedicated to finding ways to boost bilateral trade between Viet Nam and Europe.

The EU had become an important partner to Viet Nam over the past 20 years, the envoy who led its delegation said.

Both had always attached importance to strengthening their multifaceted co-operation, especially since the signing of the Framework Agreement for Viet Nam-EU co-operation.

Viet Nam and EU members Britain and Spain had turned their relationship into a strategic partnership.

Deputy Foreign Minister Affairs Bui Thanh Son told the seminar titled, “Prospects for the co-operative relationship between Viet Nam and the European Union in the 2010-2001″, that the value of trade between the two had increased from US$1.5 billion in 1995 to $15.2 billion in 2009.

The EU had been the first partner to grant Viet Nam generalised-system-of- preference (GSP) status, he said.

And 21 of the 27 EU member countries had invested in 947 projects in Viet Nam worth $13.3 billion at the end of 2009.

Obstacles

But the development of bilateral trade faced obstacles that needed to be addressed.

For example, the difference in development between Europe and Viet Nam meant that the union’s standards were too high for the latter’s enterprises to meet.

EU investors also set high requirements for doing business in Viet Nam.

In addition, the EU imposed anti-dumping taxes and removed some of Viet Nam’s exports from the list of products enjoying GSP status in an effort to protect its domestic industries.

But the Partnership and Co-operation Agreement between Viet Nam and Europe that was expected to be signed in January would help both exploit their comparative advantages.

The agreement would also create the foundation for negotiations of a free trade agreement between Viet Nam and Europe that would help the latter into the EU market.

The attractiveness of Viet Nam to EU investors would also increase.

Deputy Industry and Trade Minister Tran Quoc Khanh said footwear was Viet Nam’s major export to the EU and was worth $2 billion in 2009 – double the 2000 figure.

But the EU had imposed an anti-dumping tax on leather-capped shoes and had not allowed footwear GSP status since 2009.

Khanh said the EU was unlikely to review the GSP status in the next two or three years.

EU consumers also give priorities to the environment, origin and social responsibility of enterprises and these factors had become an invisible barrier for Viet Nam’s exporters.

Fierce competition among exporters to the EU, stagnant consumer power following the global financial crisis and anti-dumping taxes as well as high quality requirements would prove unfavourable for Viet Nam’s exports.

But if the EU had not escaped from the effects of the crisis, Viet Nam’s exports would probably have grown at less than 15 per cent a year for the next two or three years, instead of the prevailing 15-20 per cent.

Trade shift

Deputy Minister Khanh forecast that the effects of “trade shift” would become clearer as free trade agreements between Viet Nam and South Korea, China, Japan, New Zealand, Australia and India come into force.

Viet Nam and the EU had not had such an agreement and it was likely to take two or three years to finish the necessary negotiations, he said.

The deputy minister emphasised that if the EU continued to deem Viet Nam a non-market economy, it would neutralise its commitment to reduce import taxes in any FTA.

This would create a huge imbalance in opportunities to access the two markets, he said.

Former Industry and Trade Minister Truong Dinh Tuyen said the EU was still slow about participating in the development of both ASEAN and APEC despite realising both represented a dynamic and emerging region.

The EU was also slow to recognise Viet Nam as a market economy although both Australia and New Zealand with their highly developed economies had done so.

The former minister also asked the EU to remove the dumping tax imposed on Viet Nam’s leather-capped shoes.

European Chamber of Commerce, Viet Nam, chairman Alain Cany suggested Viet Nam accelerate reform of its State-owned enterprises to win recognition as a market economy. — VNS