Evipa

Vietnam will be able to reap fruit from the EVFTA if it can improve the legal framework and enhance implementation capability.

Vietnam is looking for cooperation with French companies in fields of renewable and green energies, hi-tech, agriculture, manufacturing and processing.

With the enactment of the EU – Vietnam Free Trade Agreement (EVFTA) and the EU – Vietnam Investment Protection Agreement (EVIPA), it is expected that more European businesses, French ones included, will be looking for strategic partnerships with Vietnamese peers to form new production and supply chains.

Overview of the online conference. Photo: MoIT.

The growing interest of French businesses presents opportunities for Vietnamese enterprises to further integrate into global value chains, but also requires them to change their business mindset, production method and corporate governance to meet strict requirements of the European market, said a representative of over 400 French companies participating at an online conference discussing the EVFTA impacts on July 8.

The event was the first of its kind held by Vietnam’s Ministry of Industry and Trade (MoIT) and a European country regarding the EVFTA, aiming to equip all parties involved with useful information before the deal comes into effect on August 1, 2020, stated the MoIT.

More French and European businesses will be looking for strategic partnership with local peers to form new production and supply chains. Photo: MoIT.

Minister of Industry and Trade Tran Tuan Anh said Vietnam is looking to cooperate with French companies in the fields of renewable and green energies, hi-tech, agriculture, manufacturing and processing, in which French companies have strong expertise.

The Vietnamese government would create the utmost conditions in terms of business environment, infrastructure conditions to boost cooperation between the two business communities, Minister Anh stated.

Trade between Vietnam and France more than tripled from US$1.6 billion in 2009 to US$5.3 billion in 2019, in which France is Vietnam’s third largest trading partner in Europe, only behind Germany and the Netherlands.

As of May, France has 588 ongoing projects in Vietnam with capital of a combined US$3.56 billion, being the second largest European investor in Vietnam, behind the Netherlands.

Due to Covid-19 damage, Vietnam – France trade revenue in the first five months declined by 18.66% year-on-year to US$1.77 billion. The MoIT expected a recovery in trade could only happen in the final months of the year after France restarts its economy.

Vietnam has puts high hopes on EVFTA, but the COVID-19 pandemic may make the path to realize its benefits a bumpy one.

No interpellations will be included at the month-long session.

Vietnam’s National Assembly (NA) of the 14th tenure (2016-2020) opened today [May 20] the ninth biannual plenum with an online meeting, the first-ever of its kind due to the coronavirus pandemic.

Top leaders gather at the ninth National Assembly plenum on May 20

The ninth plenum will include two sessions, with the first one to be held online from May 20 to June 4 and the second one taking place from June 10 to June 19 at the National Assembly Headquarters in Hanoi.

At the virtual meeting, live connections will be established in all 63 provinces and cities for the representatives from their localities to have speeches and discussions online, the National Assembly’s General Secretary Nguyen Hanh Phuc told local media.

Meanwhile, speeches and discussions at the hall will take place according to regular procedures.

Notably, there will be no interpellations at the parliament like before. The NA deputies will make questions to cabinet members via documents.

Zing cited deputy Nguyen Ngoc Phuong from Quang Binh NA Delegation who expressed concerns about the effectiveness of the online meetings. He said that the discussions might not give results as expected.

Deputy Pham Van Hoa from Dong Thap Delegation said this plenum will discuss many issues of public attention like embezzlement in the procurement of coronavirus testing machines, the covering up of a mafia-like gang in the northern province of Thai Binh.

In addition, deputies want to listen to the government’s solutions to achieve its “dual goal” that include effective fight against the pandemic and economic development, Hoa noted.

Reports at the opening day

At the opening session on Wednesday, a number of reports have been presented, including those on the 2019 socio-economic situation and plans for 2020 and constituents’ recommendations sent to the parliament.

Prime Minister Nguyen Xuan Phuc presented issues in relation to the socio-economic situation and budget well as the impacts of the Covid-19 pandemic and response.

Meanwhile, Vice State President Dang Thi Ngoc Thinh presented the State President’s petition for the approval of the European Union Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA).

In one month and a half, the amount of Vietnamese goods and products that benefit from EVFTA’s preferential treatment is equivalent to that of the CPTPP throughout 2019.

The EU – Vietnam Free Trade Agreement (EVFTA) is an important instrument that could help Vietnam realize its ambition of eventually becoming a high-income country by 2045, a target set by the State President Nguyen Phu Trong, according to senior economist Pham Chi Lan.

Overview of the conference. Photo: Nguyen Tung.

“While there have been mixed feelings towards the implementation of previous free trade agreements (FTAs), the timing and all optimism around the deal make us believe this would be a different story,” Mrs. Lan said at a conference discussing the EVFTA on September 24.

Given the fact that the foreign-invested sector currently makes up nearly 70% of Vietnam’s exports, Mrs. Lan said these FTAs have not achieved the purpose of building up the country’s internal strength, the most important factor during the global integration process.

“There would be no sustainable growth by relying on others,” she added.

The EVFTA came at a time when Vietnam was coming up with the next long-term strategy, therefore it would give the country a boost in going forward amid the Covid-19 crisis.

“Both the EVFTA and the Covid-19 pandemic are pressurizing the Vietnamese government and enterprises to change for better,” Mrs. Lan noted.

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said the EVFTA is what Vietnam needs most at the moment since it helps Vietnam form closer cooperation with the EU, one of Vietnam’s trusted partners in pursuing sustainable development strategies.

“In a world of escalating trade tensions and growing protectionism, the EVFTA is expected to create a new competitive edge for Vietnamese enterprises and make Vietnam more attractive in the eyes of investors looking to diversify their supply chains,” Mr. Loc said.

“27 in 1”

Nguyen Thi Thu Trang, director of VCCI’s WTO Center and Economic Integration, highlighted the complementarity between Vietnam and the EU’s economies is what sets the deal apart from others.

In Vietnam’s other FTAs, all partners have a similar economic structure or even directly compete with Vietnam. “A win-win situation is more likely in the EVFTA compared to others,” Mrs. Lan said.

More importantly, all 27 EU members have not had a bilateral trade deal with Vietnam, so it could be seen as a 27 in one FTA, she added.

Mrs. Lan also pointed out the fact that the EU is the world’s second largest buyer, making the deal more meaningful for an export-oriented country like Vietnam.

Additionally, while the EU has not been Vietnam’s largest investor, it is the world’s main source of foreign investment. As a result, the EVFTA and the EU – Vietnam Investment Protection Agreement (EVIPA) would make Vietnam more attractive to European investors, Mrs. Lan said.

To go into detail how the deal has performed after having been effective for over a month, Luong Hoang Thai, director general of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, said Vietnam’s exports to the EU in August stood at US$3.78 billion, of which, goods and products worth US$277 million, or 7.3% of the total export turnover, received preferential treatment from the deal.

By mid-September, the figure has risen to nearly US$500 million, which is equal to the total amount of Vietnamese products subject to preferential treatment from the Comprehensive and Progressive Agreement for Trans – Pacific Partnership (CPTPP) for the whole year of 2019, Mr. Thai added.

Textile and garment, Vietnam’s major export items to EU, are still enjoying the EU’s Generalized Scheme of Preferences (GSP- a set of EU rules allowing exporters from developing countries to pay less or no duties on their exports to the European Union), so the actual figure of goods benefiting from EU’s preferential treatment would be much higher, Mr. Thai concluded.