EVFTA and EVIPA hold strategic and economic significance to Vietnam-EU relations

Update: 16:00 | 13/02/2020
The European Parliament (EP) on Wednesday ratified the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA). The World and Vietnam Report spoke to Deputy Minister of Foreign Affairs Bui Thanh Son about the agreements.
TIN LIÊN QUAN
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evfta and evipa hold strategic and economic significance to vietnam eu relations European Parliament ratifies EVFTA and EVIPA
evfta and evipa hold strategic and economic significance to vietnam eu relations
The European Parliament (EP) voted to ratify the Free Trade Agreement (EVFTA) and Investment Protection Agreement (EVIPA) between EU and Vietnam on February 12th, in Strasbourgh, France.

The European Parliament (EP) has ratified the Free Trade Agreements (EVFTA) and Investment Protection Agreement (EVIPA) between the European and Vietnam recently. Could the Permanent Deputy Foreign Minister elaborate on the importance of such decision?

Recently, EP has made strategically and economically important decisions on Vietnam – EU relations, revealing a new horizon of more deepened, inclusive and effective cooperation between the two sides, right on the occasion of the 30th anniversary of Viet Nam - EU bilateral diplomatic ties (1990 – 2020).

Signed on July 30th, 2019 in Ha Noi, EVFTA would come into effect after the Congress of Vietnam and EP’s ratifications, while the EVIPA would require the Congress of Vietnam, EP and EU member State parliaments to ratify. EP’s decisions have “greenlighted” for the implementation of EVFTA and created the premise for EU member State parliaments to consider and ratify EVIPA in upcoming time.

First of all, the highly approved decision to ratify EVFTA and EVIPA showed that members of EP (MEPs) highly regarded Vietnam’s position and role, as well as the Vietnam – EU comprehensive partnership. The two agreements would help construct long-lasting bilateral cooperation framework aiming to equal partnership, mutually benefits and contributing to the general trend of promoting international economic connections and sustainable development.

Second, the ratification of such agreements would reaffirm EU’s policy of increasing its connectivity with Asia – Pacific region generally and ASEAN specifically. As the ASEAN Chairman 2020, we are ready to coordinate and promote EU – ASEAN multi-faceted cooperation.

Third, EP’s ratification of the two agreements at the beginning of its term shows the significant economic benefits that EVFTA and EVIPA could bring to the table. EVFTA would create opportunities for EU businesses to access Vietnam’s market of nearly 100 million people, thereby having deepened access to ASEAN and regional markets; EU’s GDP is expected to grow by 30 billion USD, with the exports rising by 29% in 2035. For Vietnam, EU is the second largest market for Vietnam’s exports; the implementation of EVFTA is expected to increase the country’s GDP by 4.6% and exports to EU by nearly 42.7% by 2025. Therefore, EP’s decision was warmly welcomed by both business communities.

Fourth, in spite of differences among MEPs, their support for the EU’s first high-quality free trade agreement (FTA) with a developing country shows the EU’s determination in continuously promoing rule-based trade and investment liberalization. EP’s decision would create hopes and solidify the trend of international economic integration and free and open trade. This is crucial in the context of inceasing protectionism threatening gloabal, regional and national economic growth.

We believed that EVFTA and EVIPA, after their ratifications and coming into effects in 2020, would create immense driving forces for Vietnam – EU relationship and establish new landmarks in Vietnam’s socio-economic development and international integration.

evfta and evipa hold strategic and economic significance to vietnam eu relations
Permanent Deputy Foreign Minister Bui Thanh Son exchange words with MEPs on the sideline of the meeting on February 12th.

Could the Deputy Foreign Minister share more about the challenges, complexities and bilateral efforts in accomplishing such decisive achievements?

EVFTA and EVIPA are agreements with EU’s highest degree of commitment to a developing country; therefore, the ratification process must comply with EP and EU member states’ strict regulations. The consideration for ratification must go side-by-side with ensuring the effectiveness of implementation. Moreover, the rise of protectionism, EU’s internal political fluctuations, especially the Brexit process, the different views and interests within the EP, and the two sides’ differences in development level and political – social institutions… also created numerous challenges during the consideration and ratification of the two agreements.

The results at EP showed that while a large portion of MEPs supported EVFTA and EVIPA, there remained some MEPs with non-positive opinions. There are parties in EP that remain committed to protectionism and stand against FTAs, in spite of their support for promoting relationship with Vietnam and regard for its increasingly important role. Other MEP groups focus on specific issues such as sustainable development, combating illegal fishing, implementation of high labor standards, human rights, child labour, and mechanisms to guarantee effective implementation. Therefore, our process of directly conversing, providing information, and helping other EU member states and 700 MEPs to understand the objective reality in Vietnam and its efforts in reform, integration, as well as the collaboration in solving mutual concerns was rather timely, effective and highly appreciated. Two days before the voting on the EVFTA and EVIPA, EP was forced to vote on wether to suspend the voting for the two agreements because of the drastic pressure and demands from a few EP parties and committees.

It can be said that while both sides share the strategic and economic benefits from the agreements, our major approvals in EP were resulted from tremendous efforts of the Government, the National Assembly and numerous related Ministries, departments and divisions. It is crucial that EU and Vietnam’s Senior Leaders and ministries wholly supported and highly valued the signatory and ratification of the two agreements. During regular contacts and meetings between our Party, Government, and Congress Leaders and leaders of ministries, departments and divisions with EP’s Senior Leaders and member State Leaders, directors of EP Committees, EU Committees and agencies, both sides determined to promote the ratification of the EVFTA and EVIPA as soon as possible. Since then, Senior Leaders of the two sides closely directed relevant agencies to tightly coordinate to promote this process.

evfta and evipa hold strategic and economic significance to vietnam eu relations
Permanent Deputy Foreign Minister Bui Thanh Son visited and worked with the European Parliament to promote the ratification votes for EVFTA and EVIPA.

Vietnam’s relevant agencies, specifically the Ministry of Foreign Affairs, the Ministry of Industry and Trade, the Ministry of Labour, War Invalids and Social Affairs, the Ministry of Public Security, the Ministry of Planning and Investment, Foreign Relations Committee and Congress agencies coordinated frequently and effectively with EP agencies to proceed with ratification procedure, building plans and detailed roadmaps to inform EP, especially the roadmap to implement EVFTA commitments on labors, sustainble development, establishment of domestic advisor groups and coordinating mechanisms between the two Congresses during the implementation… on the foundation of ensuring our national interests. The Prime Minister’s decision to send a Special Delegation, organized by the Ministry of Foreign Affairs with the participation of relevant Ministries, to Brussels (Belgium) and Strasbourg (France) prior and during the ratification voting provided essential information timely and gathered supports from MEPs. Our Missions in Belgium, EU and EU member states also actively exchanged and advocated the MEPs and local partners to promote the ratification processes of the two agreements.

As comprehensive and high - quality trade and investment agreements that we signed with a leading economic and trade partner, what benefits will EVFTA and EVIPA bring to Vietnam's economy and businesses?

The EVFTA and EVIPA will create a new impetus to promote and deepen the economic - trade - investment relations between Vietnam and the EU, which is commensurate with expectations and potentials of the two sides.

evfta and evipa hold strategic and economic significance to vietnam eu relations
Fully utilizing opportunities could provide numerous competitve advantages for Vietnamese businesses in the EU market to increase the total volume of exports. (Source: VlR.vn)

With a deep and comprehensive level of commitment and due to the complementarities between the two economies, EVFTA will bring great benefits to both sides. Once the EVFTA takes effect, the EU will eliminate import taxes on nearly 86% of tariff lines from Vietnam and increase to the reduction of 99% of tariff lines after 7 years; while Vietnam immediately removes 48.5% of tariff lines for EU goods in the first year and increase to the reduction of 91.8% of tariff lines after 7 years. If taking advantage of opportunities, Vietnamese businesses will have more competitive advantages in the EU market to significantly increase export, especially in areas where we have strengths and preferential tariffs, such as textiles, footwear, agricultural and fishery products. In the context of very complicated trade tensions among countries, the EVFTA will help our businesses to enhance the diversification of markets and partners and to create a firmer foothold in the EU's huge market. Vietnamese people also have access to goods and equipments unavailable in Vietnam.

The EVFTA and EVIPA will also contribute to further promoting high quality investment flows from the EU, accompanied by leading advanced technology, management knowledge and new areas of digital economy.

In addition to economic commitments, EVFTA also covers many new commitments on sustainable development, climate change adaptation, sustainable forest governance, high standards of labor and environment. The effective cooperation between the two sides in implementing these commitments will contribute to further promoting reform, sustainable growth, raising labor standards and people’s living standards.

evfta and evipa hold strategic and economic significance to vietnam eu relations
The Vietnamese Delegation during the trip to the European Parliament.

In order for the EVFTA to be implemented soon, relevant agencies need to complete necessary procedures to soon submit to the National Assembly for consideration and ratification of the two agreements. We also need to actively promote Parliaments of EU member states to ratify the EVIPA soon.

Ministries, departments, localities and businesses should urgently develop plans to implement the agreement, propagate and disseminate commitments, grasp new regulations so that businesses can make good use of opportunities; at the same time, to respond to challenges that may arise when implementing the agreements.

Under the leadership of the Party, with the joint efforts of the National Assembly, the Government, ministries, localities, businesses and people, we believe in the implementation of EVFTA and the upcoming EVIPA will bring great benefits to Vietnam's economy, making an important contribution to the realization of socio - economic development goals, extensive and comprehensive international integration and empowerment of the country’s position, which will be adopted at the 12th National Party Congress.

Thank you so much, Mr. Deputy Foreign Minister!

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