Bags of rice loaded into a ship for export (Photo: VNA)Hanoi (VNA) – The European Union-Vietnam Free Trade Agreement (EVFTA)and the EU-Vietnam Investment Protection Agreement (EVIPA), scheduled to becomeeffective in July, will help improve Vietnam’s business and investment climateand boost its institutional reform, thus contributing to fostering its growthin a long term, according to an official.
In a recent interview granted to the Vietnam News Agency, General Director ofthe General Statistics Office (GSO) Nguyen Bich Lam cited the European TradePolicy and Investment Support Project (MUTRAP)’s prediction as saying that theEVFTA will help Vietnam’s gross domestic product (GDP) increase by 2-2.5percent, especially its exports to the EU up 75 percent and its imports fromthe union up 25-35 percent.
The European Parliament’s ratification of the EVFTA made Vietnam the firstdeveloping country in the Asia-Pacific having free trade relations with the EU,thus helping affirm the country’s important political position and role in theregion.
Once the agreement takes into effect, over 99 percent of tariff lines will belifted after seven years, facilitating the export of Vietnamese products to theEU.
The agreement will open up more opportunities to attract investments from theEU, Lam said, adding it will also create pressure both directly and indirectly forVietnam to improve its institutions and business environment through stricterrequirements on the business and investment climate, fair competitiveness,sustainable development and labour conditions.
The GSO head also cited reports’ results as saying that the EVFTA will helpincrease Vietnam’s GDP by 2.18-3.25 percent in 2020-2023 and above 4 percent inthe next years.
However, besides positive impact, Lam pointed to several challenges facing theVietnamese economy.
Weaknesses in domestic enterprises’ competitiveness and weak, overlapping lawand policy systems, unequal growth in several industries and limited awarenessof people and enterprises are the biggest challenges, he stated.
Furthermore, once the agreement becomes effective, the EU’s goods with highquality and attractive packaging will flood the Vietnamese market, thus causingmore pressure on Vietnamese products.
To take advantage of the EVFTA, he suggested the Government reform economicinstitutions to create an environment and economic policies in accordance withthe agreement’s contents, and encourage local businesses to invest intechnology to increase their products’ quality and competitiveness.
The Government should complete the legal framework to eliminate trade fraudsand make transparent origins of goods in international commerce between Vietnamand the EU, and at the same time, increase the quality of education and training,especially vocational training to meet higher market demand.
It is also important to put forward scientific, strategic and long-term stepsduring industrialisation and urbanisation, he said, adding that administrativeprocedures must be simple to prevent corruption so as to ensure a sustainableand long-term relationship in business and investment.
The Government should assign a specific organisation, such as the VietnamChamber of Commerce and Industry, to provide guidance for the businesscommunity to make them understand more about the EU market as well as itsrequirements. Meanwhile, enterprises themselves should study the EVFTA to havesuitable movements, Lam added./.
VNA
