Vietnam, EU Reach Market Access Deal

Vietnam, EU Reach Market Access Deal

Vietnam and the European Union (EU) signed an agreement on market access in Brussels, Belgium, on March 31, aimed at expanding commercial and investment relations between the two countries.

The signatories were Phan Thuy Thanh, Vietnamese Ambassador to Belgium and head of the Vietnamese delegation to the EU; Martin Schommer, head of the Luxembourg delegation to the EU, representing the European Council; and Paul Vandoren, from the Directorate General for Trade of the European Commission (EC), representing the EC.

Under the agreement, as from January 1, 2005, the EU has suspended the system of import quotas for Vietnam's garments and textiles and will eventually abolish them. In turn, on the same date, Vietnam began to apply import tariffs on garments, cloth and yarns from the EU at the lower levels specified in the Agreement on trade of garment and textiles and measures to open-up the market which was initialed in Hanoi on February 15, 2003.

Vietnam will apply a tariff of 5 per cent on yarns, and 65 per cent on wine and other drinks containing alcohol from the EU.

Vietnam also commits under the agreement to create favorable conditions for EU investors such as supplying services, environmental protection, life insurance, maritime transportation and construction.

EU Commissioner Peter Mandelson is scheduled to pay an official visit to Vietnam on April 26 and 27 to discuss with the Vietnamese Government the implementation of the agreement.

Last year, the EU became Vietnam's largest trading partner with bilateral turnover reaching US$7.3 billion, an increase of 20 per cent against 2003. The value included US$5.1 billion worth of Vietnamese exports.

Vietnam expects exports to the EU will increase to US$6.2 billion this year.

Its key exports to Europe include leather products and footwear, textiles and garments, seafood and coffee, all of which are primarily consumed by German, Italy, France and the UK.

Vietnam Economic Times