Nhóm 7 - KTĐN

THE RELATIONSHIP BETWEEN VIETNAM AND THE EU

•Lê Nguyên Khánh•Vũ Phương Uyên•Lê Xuân Thuận

Group 7

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1. Establishing Vietnam – EU relation

2. Vietnam and EU’s targets

3. Vietnam’s perspective

4. Factors affecting Vietnam – EU relation

5. Conclusion

1. Trade agreements

2. Trade

3. Investment

1. Benefits

2. Challenges

3. Solutions

OVERVIEW

VIETNAM – EU TRADES AND AGREEMNETS

CONCLUSION

Establishing

Vietnam – EU relation

Signing the Framework

Cooperation Agreement on

collaborating and setting basic

principles in order to enhance

the participants’ relations on

July 17th

1990FCA is a long-term framework

agreement, which enters force

on June 1st 1996 with 4 main

objectives. EU’s first diplomatic

mission - the permanent

Delegation of EU to Vietnam

was established in Hanoi

1995 1996Vietnam and the European (the

European Community at the

time – The EU’s precursor)

officially established a

diplomatic relation, forming a

firm base for an overall long-

term relationship

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To support sustainable economic development in Vietnam, especially takes notice in improving living conditions for the poor.

To support environmental protection and the sustainable management of natural resources.

To secure the conditions and promote the development of bilateral trade and investment on the base of win-win principal and grant each other MFN statute.

To enhance economic cooperation, including support to Vietnam’s efforts to move towards a market economy.

Establishing


Vietnam and EU agreed on a

mutual economic corporation

and development strategy in

order to enhance Vietnam’s

conversion process to a market

economy

1996

In June, EU-Vietnam Framework

Agreement on Comprehensive

Partnership and Cooperation

(PCA) was signed. FTA

negotiations with Vietnam

started

2012

The agreement in principle

reached on 4th August 2015 for

a free trade deal includes the

elimination of nearly all tariffs

(over 99%)

2015

Establishing


Finally, after 3 years and 14 rounds of talks, on 2nd December

2015, the EU and Vietnam declared to officially complete

negotiations for an EU-Vietnam Free Trade Agreement (FTA).

In 2015, the EU and Vietnam are celebrating the 25th anniversary

of diplomatic relations.

2015

Vietnam’s Target

Exporting is one of Vietnam’s main targets. European Union has been

and still is one of the Vietnam’s biggest partner, a wide and potential

consuming market for Vietnam’s products such as shoes, textiles,

agriculture commodities, handicrafts, joineries, plastic products and

aquatic products, etc.

EU is also a highly economic developed zone, which can easily satisfy

the rising needs of technology imports and input sources for several

industries, eventually serving Vietnam’s economic development and

executing the nation’s industrialization and modernization.

Earning foreign investments from the EU is another target. Indeed,

The EU is one of the largest foreign investors in Vietnam.

Supporting the sustainable economic development of Vietnam and the improvement of living conditions of the poor

Encouraging the integration of Vietnam in the world economy and trading system and supporting the process of economic and social reforms.

Supporting Vietnam's transition to an open society based on sound governance, rule of law and respect for human rights.

Raising the profile of the European Union in ASEAN generally and in Vietnam specifically.

EU’s Target

EUROPE

Vietnam’s perspective

Strengthening relations with EU also indicates the consistence in Vietnam’s Party and

Government’s foreign policies of multilateral and diversified international politics and

economic relations, in which EU is the priority. However, it is important that Vietnam does not rely on EU or the relation between the two, as Vietnam needs to be economically

strong and independent.

The appearance

of the EU and a mutual

currency

PoliticsGlobalization

Vietnam’s rapid growth

pace and human right

problems

The Cambodia

matter

The Cambodia

matter

The appearance of the EU and a mutual currency

Vietnam’s rapid growth

pace and human right

problems

Globalization

Politics

A1992 Vietnam and European Communities signed textile agreement.

A1997 Vietnam joined ASEAN –EU cooperation agreement.

A2005 Vietnam adopted a Master Plan and Action plan in developing Vietnam – EU relations towards 2010 and orientations towards 2015.

A1995Vietnam and European Community signed Vietnam – EC framework cooperation agreement.

A2003Vietnam – EU human rights dialogue was launched.

A2008 The negotiations on a Framework Agreement on Comprehensive Partnership and Cooperation (PCA) were launched.

A1990Vietnam and European Communities officially established diplomatic relations.

A1996European Commission set up its permanent Delegation to Vietnam

A2004First Vietnam – EU Summit in Hanoi

A2010

Vietnam – EU PCA was initialed.

A2012

Vietnam – EU PCA was officially signed and the negotiations for a Vietnam – EU Free Trade Agreement (FTA) started.

A2015

Officially finish Vietnam – EU FTA negotiations after 3 years and 14 talk rounds.

The EU- VN FTA

1.1 – Eliminating customs duties1.2 – Reducing non-tariff barriers to European exports 1.3 – Protecting European Geographical Indications 1.4 – Allowing EU companies to bid for Vietnamese public contracts1.5 – Creating a level playing field for EU companies and innovative products.1.6 – Opening the Vietnamese market for EU services operators.1.7 – Promoting and protecting investment.1.8 – Establishing an efficient mechanism to resolve future disagreements.1.9 – Safeguarding social and environmental protection standards.1.10 – Promoting democracy and respect for human rights.

Eliminating customs dutiesA few concrete examples:

Almost all EU

exports of

machinery and

appliances will be

fully liberalized at

entry into force

and the rest after

5 years.

Car parts will be

duty free after 7

years. Roughly

half of EU

pharmaceuticals

exports will be

duty free at entry

into force and

the rest after 7

years.

The totality of EU

textile fabric

exports will be

liberalized at

entry into force.

Close to 70% of

EU chemicals

export will be

duty free at entry

into force and

the rest after 3, 5

and 7 years.

Vietnam will also open its market for most EU

food products, both primary and processed, allowing EU high quality

exports to reach its growing middle class

consumers.

Wines and spirits will be liberalized

after 7 years.

Frozen pork meat will be duty free after 7 years, beef after 3 years and dairy products after a maximum of 5 years and food preparations after a

maximum of 7 years.

Chicken will be fully liberalized after 10 years.

The EU- VN FTA


The EU and Vietnam have also agreed

on disciplines fully in line with

Government Procurement Agreement

(GPA) rules, achieving a degree of

transparency and procedural fairness

comparable to other EU FTAs with

developed countries and more advanced

developing countries. EU businesses will

be the first foreign companies to get

such a level of access to Vietnamese

procurement markets.

Vietnamese ministries, including for

infrastructure such as roads and ports,

important state-owned enterprises such

as the power distribution company and

the nationwide railway operator, 34 public

hospitals in the two biggest Vietnamese

cities, Hanoi and Ho Chi Minh City.

Allowing EU companies to bid for Vietnamese public contracts

The EU- VN FTA


TRADE

In 2014, the EU constituted one of the

most important overseas markets for

Vietnam (EU came second after it was

closely overtaken by the US by only US$ 500

million)

The EU purchased as much as 18.6% of the country's global exports in 2014. The two way trade expanded by 8.8%, mainly owing to the impressive growth rate of Vietnam's exports to the EU which made year-on-year increase of 14.7% (US$ 27.9 billion)

The EU was also the second largest trading partner of Vietnam after China (excluding intra-ASEAN trade)

In particular, the continuous surplus of US$19 billion that Vietnam enjoys in its bilateral commercial links with the EU significantly helped to balance Vietnam's huge trade deficits with China and South Korea and led to an estimated global trade surplus of about US$ 2 billion

Thus, 2014 marks another year in which Vietnam enjoys a record-high trade surplus with the EU. Meanwhile, the EU's exports to Vietnam tumbled by 5.9% during 2014

Vietnamese exports to the EU concentrated on labor intensive products including assembly of electronic items/ telephone sets, footwear, garments and textiles, coffee, seafood and furniture. The main commodities of EU exports to Vietnam are high-tech products, including boilers-machinery & mechanical products, electrical machinery & equipment, pharmaceutical products, and vehicles.

INVESTMENT

The electric production

and distribution and

estate & business

planning come second

and third, with $3,54

and $3,4 billion in

registered capital

According to the

Foreign Investment

Agency of the

Vietnamese Ministry of

Planning and Investment,

investors from 22 out of

28 Member States of the

EU injected a total

committed FDI worth

US$21.48 billion into

1710 projects over the

course of the past 25

years (by December 20th

2015).

The investors

concentrated on

manufacturing, electric

production and

distribution, estate and

business planning.

Manufacturing has 590

projects and the total

capital is $6.62 billion.

The projects be set in

52/63 provinces and

crowded in Ho Chi

Minh City, Hanoi, Ba

Ria – Vung Tau

province, Quang Ninh

province, Dong Nai

province

In 2014 the EU ranked

fifth among the big FDI

partners of Vietnam.

From January to mid-

December 2014, the

EU had a combined

committed FDI of

US$587.1 million

EU investment in

Vietnam is mainly in

two forms: a joint

venture and 100%

foreign capital

In 2015, The

Observation Complex

in the Thu Thiem New

Urban Area in Ho Chi

Minh City’s District 2,

with investment capital

of $1.2 billion were

broken on December

2nd 2015

It is a joint venture

among two

Vietnamese partners -

the Tien Phuoc Real

Estate JSC and the

Tran Thai Real Estate

Company - and the

UK’s Denver Power

Ltd under Gaw Capital

Partners

Two Vietnamese

partners and the

foreign partner hold

50% investment

capital respectively

INVESTMENT

CONCLUSION

Benefits

For EU

For Vietnam

THE STRATEGY TOWARDS ASIA OF THE EU

Secondly, the EU promotes

cooperation and mutual

understanding at the international

level to contribute to stability in

Asia

Firstly, the EU improves the economic

presence in Asia to maintain its

dominant role in the world economy

Finally, the EU contributes to developing

and consolidating democracy, the rule of

law, as well as the human rights and

fundamental freedom in Asia.

Thirdly, the EU encourages economic development

of poor countries. The EU and its members

continue to contribute to alleviate poverty and

create sustainable growth in Asia region

Resources and market

Europe is an area which has disadvantages about natural

resources, climatic condition and population, but it has much

experiences of accumulating experience of development, appreciable capital and high

technology level. Viet Nam has strategic position, diversity of natural

resources, workforces, big market with demand of capital, technology

and management experience.

The Vietnamese community in Europe

There is a large number of Vietnamese people living in Europe. Vietnamese people in Europe are who were born in or immigrated to Europe, or moved to the EU in order to look up for jobs. Obviously, the demand for Vietnamese products is remarkably high. To meet the demand of this community benefits to both Vietnam and Europe.

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Trade plays an important role in the relationship between Vietnam and EU. Currently the EU is the 3rd largest trading partner and the 2nd largest export market of Vietnam

The EU is one of the most important partnership and market

It’s one of the most important resource for Vietnam development

Investment from the EU

Poverty reduction and sectors setting the foundation for inclusive and sustainable growth, including good governance; social protection, health and education; supporting a favorable business environment and deeper regional integration; and sustainable agriculture and clean energy, helping to provide safeguards against external shocks and turn challenges of food security and climate change into opportunities for growth

Technical and financial co-operation

The EU is the world’s largest provider of financing for humanitarian aid operations. Altogether, the European Commission and the governments of the 28 EU Member States pay for more than 50% of the assistance that comes from official channels

Humanitarian Aid

.

Benefits for Vietnam

Challenges

Business

environment

Vietnamese

state

enterprises

The protection

of intellectual

property rights

Infrastructure

Debt crisis in

Europe

Popularity of

Vietnamese

products

Transportation

cost

Competitiveness

of other

countries

zerothe

Solution for businesses/enterprises

Decreasing transportation

costs

Enhancing competitive ability

Promotion strategies

Offering financial and advising supports

Solutions for Government

Promoting Vietnam’s images, especially through natural

wonders and diverse cultures, in the EU nations should be

intensified in order to push tourism

Establishing laws to ensure recognition to technology’s

origin

Establishing favorable rules and policies to encourage EU

enterprises and investors

Documents

Nhóm 7 - KTĐN