The EU-Vietnam Partnership and Cooperation Agreement is to act as a bridge to bring Vietnam and European Union enterprises together. Tran Ngoc Quan, deputy head of the Ministry of Industry and Trade’s European Market Department, told VIR the 2012-clinched EU-Vietnam Partnership and Cooperation Agreement (PCA) would open the door to the EU market.

Specifically, the EU is committed to strengthening consultations to improve the efficiency of using the benefit that the EU’s generalised system of preferences (GSP), which provides developing countries with unilateral tariff preferences, could bring to Vietnam. The EU is also committed to offer Vietnam special economic relations treatment towards early recognition of its market economy.

For instance, in 2009 the EU removed Vietnamese footwear from the GSP, putting greater pressure on domestic producers and exporters. At that time, the removal of GSP averagely increased import duties in the EU market by 3.5-5.5 per cent, while duties on leather and canvas footwear surged to 8 and 17 per cent, respectively.

Quan said the EU was preparing to adjust the GSP for 2014-2015 and Vietnam proposed that the EU continue granting GSP to Vietnam for the sake of the Vietnam-EU Free Trade Agreement (FTA), whose first round of negotiations kicked-off on October 8, 2012.

“Notably, the PCA also facilitates enterprises from Vietnam to organise dialogues with governments of EU member states about investment and trade policies. EU enterprises can also do the same with Vietnam’s government. This mandatory mechanism will therefore help improve investment and trade between Vietnam and EU,” Quan said.

European Delegation to Vietnam head Franz Jessen said the PCA boasted a mechanism in which Vietnam-based enterprises would be provided updated policies about EU trade including barriers.

Tran Ngoc An, head of the Ministry of Foreign Affairs’ European Affairs Department, said the PCA’s trade-investment chapter also created an important premise for the two sides to start FTA negotiations, expected to be inked over the next two years and see 90 per cent of import tariffs from both markets gradually be reduced to 0 per cent.

Besides, under the PCA, the EU was committed to continuing development aid to Vietnam post-2013.

The PCA would broaden the further the scope of Vietnam and EU cooperation in areas such as trade, environment, energy, science and technology, good governance, tourism, culture, migration, anti-terrorism, anti-corruption and anti-organised crime.

Jessen said it would take several years for 27 EU member states to individually ratify the PCA, but Quan said it would take about one year for Vietnam to do this.

Dinh Cong Tuan, head of Journal of European Studies, said the greatest challenge in the PCA’s implementation was “the vast difference between the two sides’ level of development.” Specifically, the EU’s gross domestic product in 2011 was $17.57 trillion while that of Vietnam touched $135 billion. The EU’s per capita income was $32.900, while that of Vietnam was only over $1,200.

“Also, the EU is an economic and political union of 27 member states operating through a system of supranational independent institutions and intergovernmental. At present, the EU integration model is facing serious challenges, thus causing difficulties for the PCA’s implementation,” Tuan said.

Source:www.vir.com.vn