Vietnam to conclude free trade agreement with EU

Vietnam and the European Free Trade Association (EFTA) could be set to sign a free trade agreement (FTA) to boost the bilateral trade, says a report released yesterday.

An FTA would hold significant potential to strengthen the economic relationship between Viet- nam and EFTA, the report by a Joint Study Group established August 2010 by Vietnam's Ministry of Industry and Trade and the Ambassadors of the EFTA states (Iceland, Liechtenstein, Norway and Switzerland) said.

The Deputy Minister of Norway‘s Department of Industry and Trade, Halvard Ingebrigtsen, said the FTA signing was expected in July.

The report was an important step towards the comprehensive FTA that would cover trade in goods and services, investment, government procurement, intellectual property rights and competition. At yesterday's seminar, Ngo Chung Khanh, director of the Multilateral Trade Policy Depart-ment's WTO Division pointed out the opportunities and challenges for Vietnam in negotiating a future FTA with EFTA.

"Though EFTA is not a big economic union, it is highly dynamic and developed, making it a very promising market. Switzerland and Norway especially hold potential for Vietnamese exports," Khanh said.

The bilateral trade relation between Vietnam and Switzerland is developing favourably with an equal balance of trade. Vietnam meanwhile is looking for investments from Switzerland in many areas.

The FTA would create more opportunities for Vietnam to increase its exports to EFTA countries, especially from its strongest industries of footwear, textile and garment, handicraft, furniture, seafood, tea, coffee, rubber, and vegetables.

The challenges would include the risk of trade vulnerability in the case of a global economic crisis or fluctuations; exposing Vietnamese companies to more competition from foreign product and service suppliers; and monitoring imports of goods without the protection of trade barriers. Experts pointed out that Vietnamese exports to some countries strike a lot of barriers, especially agricultural goods.

Sveinung Roren, deputy director general of Norway's Ministry of Trade and Industry's Trade Policy Department said "the FTA would facilitate trade, for instance zero tariffs for industrial goods and tariff concessions on agricultural goods."