Bridges Weekly Trade News Digest • Volume 14 • Number 8 • 3rd March 2010

EU, Vietnam to Start Free Trade Talks

Discuss this articleShare your views with other visitors, and read what they have to say

The European Union and Vietnam announced on Tuesday that they will begin negotiations toward a free trade agreement that could allow the burgeoning Asian nation easy access to the world’s biggest consumer market.

The announcement came after a meeting between EU Trade Commissioner Karel De Gucht and Vietnamese Prime Minister Nguyen Tan Dung in Hanoi.

Vietnam, which joined the WTO in 2007 following more than ten years of negotiations, has recently implemented a host of structural reforms to modernise its economy and make its export industries more competitive. The country was hit hard by the recent economic slump - its exports fell almost 10 percent between 2008 and 2009 - but its GDP has continued to increase, registering a nearly 5 percent growth last year.

If a deal is agreed, Vietnam’s primary commodities exports - crude oil, seafood, rice, coffee, rubber, tea, garments and shoes - could secure much easier access to the European market of more than 500 million consumers. The EU, meanwhile, would gain a promising new market for its exports of machinery, autos, farm products, and pharmaceuticals.

Trade between the EU and Vietnam totalled nearly €12 billion in 2008 and grew an average of nearly 12 percent per year between 2004 and 2008, the European Commission said in a statement.

The EU must now win a mandate from European parliamentarians and from the governments of EU member states before it can begin negotiations.

The European Union is pursuing a number of bilateral and regional free trade deals as prospects for a global trade agreement at the WTO appear slimmer than ever. The EU concluded negotiations with Peru and Colombia earlier this week (see related story, this issue). The bloc has also recently inked a trade-opening deal with South Korea; negotiations with Canada are underway.

ICTSD reporting.