Vietnam and the European Union will have two years for preparation before a bilateral trade pact reached earlier this month officially enters into force, the chief representative of the 28-country bloc in Hanoi said Monday.
The Vietnam-EU Free Trade Agreement (VEFTA), which was signed in Brussels on December 2 after nearly three years with 14 rounds of negotiation, will remove nearly all tariffs between the Southeast Asian country and the grouping once implemented.
The two parties now have two years to complete all necessary procedures for the accord to become valid in 2018, Bruno Angelet, Ambassador of the EU to Vietnam, told reporters in Hanoi.
The trade pact illustrates the EU’s aspiration to be an important partner in Vietnam’s sustainable development, Angelet underlined.
The EU is now Vietnam’s second-biggest trade partner, after China, and stands only behind the U.S. as the second-largest export market of the Southeast Asian nation, according to the EU chief representative.
Earlier this year the EU also became the third-largest foreign investor in Vietnam, compared to the sixth place in 2014, he added.
Vietnam exports mobile phones and other electronics, footware and textiles, and agro-produce – including coffee, rice and seafood – to the EU, while importing high-tech products like electrical machinery and equipment, aircraft, vehicles and pharmaceuticals from the European partners, according to AFP.
Angelet told the Monday meeting that European investors are paying close attention to what the Vietnamese government will do to attract investment in the two years to come.
The VEFTA, the first of its kind to be reached between the EU and a developing country, will lift more than 99 percent of tariffs on goods traded between the two parties over a period of up to seven years, according to AFP.
In the meantime, the roadmap for Vietnam to eliminate tariffs for the EU is as many as ten years, which Angelet said is an opportunity for Vietnamese exporters to better prepare for their penetration into the European market.
The two-year period is an appropriate amount of time for both parties to conduct preparations and legal reforms for the trade pact to be effectively implemented, he added.
Angelet expressed his belief that the VEFTA will enable Vietnam to improve its competitiveness compared to other ASEAN nations.
Last year the EU signed a similar trade accord with Singapore, another member of the ten-country Association of Southeast Asian Nations (ASEAN), which also includes Brunei, Cambodia, Indonesia, Myanmar, Malaysia, Laos, the Philippines, and Thailand.
Brussels and South Korea already have a free trade agreement and the EU is holding separate talks with Malaysia, Thailand and Japan to close similar free trade deals, according to AFP.