EU and Vietnam to Finalize an FTA by October

Written by | Wednesday, August 27th, 2014

EU Commission President, Jose Manuel Barroso, is currently visiting Hanoi, where he met with Vietnam’s Prime Minister Nguyen Tan Dung to discuss various issues including trade and security. Following the meeting, Prime Minister Dung embraced progress in free trade negotiations and heralded that a free trade agreement (FTA) could be finalized by October this year. He added that the talks with Commissioner Barroso were “open and candid” and called for a deeper integration in economic relations between both parties. In 2013, EU-Vietnam trade in goods was worth almost 28 billion euros with about 21 billion in imports from Vietnam to the EU and almost 6 billion of exports from the EU to Vietnam.      

The EU is already now Vietnam’s largest export market and the second biggest trade partner after China. European investors are also among most active foreign investors in the country. In 2013, EU’s FDI was worth about 650 billion USD. Vietnam exports textiles, footwear, agricultural products such as rice, seafood, and coffee, as well as mobile phones and other electronic devices. President Barroso said there had been a good progress in FTA negotiations and the prospects for this agreement are were optimistic. The FTA is hoped to boost job creation and economic growth both in the EU and in Vietnam. It should, moreover, help Hanoi with the implementation of new reforms and management of ongoing reforms to strengthen the market side of the country’s state-dominated economy.

In addition to the FTA, both top policy-makers discussed also current tensions in the South China Sea. Vietnam has had an ongoing maritime dispute with China over islands chains in the South China Sea and territorial waters. Commissioner Barroso said that “the EU has high stakes in the region – trade and strategic interests, as well as energy and security dimensions, and we therefore encourage all partners to seek peaceful solutions in accordance with international law although the EU does not take a position on individual claims.”

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