On 31st July EuroCham and the Ministry of Industry and Trade have jointly organises the Forum on Trade and Industrial Cooperation with the European Union: the EVFTA – opportunity for strategic cooperation towards sustainable development in Ho Chi Minh City. The forum has been organized to prepare for the next day of 1 August, the entry into force of the EVFTA.
The forum has been also made available via videoconference with 27 connection points and 14 trade sections of Vietnamese Embassies at the European Union. It has gathered leaders from the Ministry of Industry and Trade, provincial leaders from 12 provinces and cities, centers for industry and trade promotion as well as representatives from the EU Delegation to Vietnam and the representative of diplomatic corps of EU Member States in Vietnam, EuroCham leaders and other industry associations, experts and businesses operation in the production, import and export, distribution, logistics and investors. Through the event, the speakers and guests had the change to update and exchange the various points of view on the potential in the economy, investment and trade relations between EU and Vietnam once the EVFTA enters into force, the developments in the market as well as regulations, policies and specific trade customs, and provide the relevant forecasts and recommendations to the Government and the business community.
Opening the forum, H.E. Mr. Hoang Quoc Vuong, Vice- Minister of Industry and Trade stated that the EVFTA comes into force within the context of rising affects of COVID 19 and the market complex development, therefore creating huge opportunities but also challenges. According to the forecasts of Asian Development Bank, the global economic loss due to the recent crisis will be of US$ 5,8 - 8,8 billion USD (equivalent to 6,4 - 9,7% global GDP). International Monetary Fund (IMF) also forecasts the global economy will decline -4,9%, the USA- 8%, EU -10,2% and China will only increase 1% in 2020. The Worl Bank estimates the economy đó, will reduce 5,2%, in which the developed countries will have decrease of 7% and the new and developing countries will have 3%.
For the EU market, according to the General Department of Customs, Vietnam's exports to the EU in the first two quarters of this year decreased by 7.37% over the same period in 2019, with a turnover of about 16.41 billion. USD. The representative of the Ministry of Industry and Trade emphasized that the Government and ministries, agencies and sectors create favorable conditions for enterprises to accelerate trade, support the settlement of difficulties and problems arising in the process of market penetration and encourage businesses with the strength, determination and aspirations to soon connect partners in the EU to develop exports.
EuroCham Vice-Chairman Mr. Jean-Jacques Bouflet, in his keynote speech, has updated that 74% of the European business leaders have expressed that the EVFTA would have positive impacts on their business operations and investment plans in the short-time and over the long-term, the figure rises to over 90%. EuroCham’s latest Business Climate Index – published last week – found that the confidence of European executives is now starting to bounce back as a result of this sure-footed handling of the COVID 19. EuroCham has been proud to work hand-in-hand with the Government, Ministries and authorities during these unprecedented times and has receipted appreciation notes from both Mr. Phil Hogan, EU Commissioner for Trade and Mr. Bui Thanh Son, Vice-Minister for Foreign Affairs and re-affirms the Chamber’s long-term commitment to Vietnam’s continued growth and success.
From 1st of August, EVFTA will set in train a gradual process of phasing out almost 99 per cent of tariff lines over its decade-long implementation period. It will give European enterprises and investors better access to Vietnam’s open, competitive, and fast-growing consumer market. In particular, European goods – from automobiles to wines & spirits – will soon be able to compete on a level field with those from other countries with which Vietnam has a free trade agreement such as South Korea, Japan, and Australia.
Mr. Bouflet, in the discussion panel also underlined the importance of the reforms in the administrative procedures as the key factor for the upcoming EVFTA implementation at both central and local levels. Vietnam has engaged seriously in laying solid foundations for the advance preparation and implementation of the EVFTA. It is fair to say that Vietnam is currently undergoing reform of almost every aspect of its legal frameworks and society. Vietnam has made huge progress over the last few decades in streamlining business conditions, enhancing the business environment, and modernizing the legal framework. Thanks to these continued joint efforts for administrative procedures reforms, the EVFTA would be fully grasped, and we hope that Vietnam will soon turn into an economic and manufacturing hub and can attract larger EU FDI flows associated with know-how, technology transfer, and enhanced quality management. In that context, both EU and Vietnamese enterprises need the Government’s further support to be aware of the market opportunities and fully prepare to also address the upcoming challenges.
Meanwhile, Vietnamese companies will get preferential access to Europe’s large and high-income consumer market. The reduction of tariffs will see an increased flow of goods like coffee, seafood, machine parts, footwear, and textiles from Vietnam to the EU’s 27 Member States.
The event attracted the attention of numerous European businesses and experts, enthusiastic discussions of delegates. The Forum was also supported by the Bosch Vietnam Co., Ltd. represented by Mr. Guru Mallikarjuna, General Manager who presented the success story of Bosch in Vietnam as an example of European investors as well as the company’s expectations and recommendations for EVFTA implementation, underlining the importance of innovation & technology, digitalisation, investment in the skilled labour and incentives to attract high-quality investors and better integration of FDIs through connecting with local SMEs and suppliers, Public Private Partnership and the local community.
The EVFTA is a strong vote of confidence in Vietnam from the EU. The fact that this is just the second FTA agreed with an ASEAN member state shows the high regard with which the EU holds Vietnam, its positive record of reform, and its strategic importance in Asia. The EVFTA will help Vietnam to go further and faster in areas including environmental standards, labour rights, legal reform, food safety standards, and sustainable development. Now, with the agreement set to enter into force from 1st August 2020, the co-operation between EuroCham and the Ministry of Industry and Trade will grow stronger than ever. It is the first of many as EuroCham will seek to unlock the full potential of this historic free trade agreement and build stronger bridges between Vietnam and European business.