After a week of negotiations in Hanoi, today EU Trade Commissioner Pascal Lamy and Vietnamese Trade Minister Truong Dinh Tuyen concluded the bilateral EU-Vietnam agreement for Vietnam's accession to the WTO. The EU, Vietnam?s largest trading partner, is thus the first major partner to conclude its bilateral deal with Vietnam, thereby giving a boost to Vietnam's accession to the WTO.
Speaking from Hanoi EU Trade Commissioner Lamy said: "Today the EU and Vietnam cement further their trade and economic relations. This deal brings Vietnam a step closer to the international trade family, the World Trade Organisation, where it belongs. It is highly symbolic that this deal is concluded in the margins of ASEM meeting, which gathers the EU and Asian family together, a sign of the EU's commitment to Asia."
Key elements of the bilateral deal
The deal concluded today covers the commitments that Vietnam will undertake in goods and services once it accedes to the WTO. It will result in further opening of the Vietnamese market, building on the reform efforts undertaken by Vietnam over the last decade, while reflecting Vietnam's status as a low income developing country.
The average tariff level that Vietnam will apply is around 16% for industrial goods, 22% for fishery products and 24% for agricultural goods.
In services, Vietnam will be taking commitments in a large range of sectors including transport, financial services, postal and courier, construction, distribution, environmental, professional and other business services, telecommunications and tourism. Commitments include cross border provision of services and commercial establishment.
WTO accession is likely to anchor Vietnam into an international rules-based trading system. It will enhance openness, transparency and predictability, which are key to attracting foreign investment and provides a foundation for improved economic governance.
WTO accession process
Vietnam applied to become a WTO member on 4 January 1995. The Working Party to cover the multilateral aspects of the WTO accession of Vietnam was established on 31 January 1995. Bilateral market access contacts were established shortly thereafter.
Topics under discussion in the Working Party include: agriculture, the customs system, import licensing, national treatment, SPS and TBT, State trading, trading rights and TRIPS. The last meeting of the Working Party took place in June 2004.
As part of the WTO accession process, Vietnam is negotiating bilateral market access deals with all interested WTO members. The EU being Vietnam's largest trading partner, the EU-Vietnam bilateral agreement is a major step in the process of Vietnams' WTO membership. Vietnam is currently conducting negotiations with the US, Japan, China, Canada, and Australia among others.
Once these bilateral negotiations have been concluded and the Working Party has completed its work on Vietnam´s trade regime, the Working Party will determine the terms of accession. These will appear in a report with a protocol of accession containing the specific market access commitments (in tariff and services schedules) of Vietnam.
Background: EU-Vietnam trade relations
The EU and Vietnam have a solid trade relationship. The EU is Vietnam's main trading partner, accounting for more than 17% of its overall trade, followed by the US (14%), Japan (13%) and China (11%).
Total trade in goods between the EU-25 and Vietnam amounted to around 6,4 billion euros in 2003. EU imports from Vietnam amounted to 4,7 billion in 2003: textiles and clothing representing 13%, agricultural products 10% and transport material 3%. EU exports to Vietnam accounted for ? 2 billion in 2003: machinery (35%), chemicals (15%) and office and telecom equipment 7%. Between 1999 and 2003 EU imports from Vietnam grew by 9% on average every year
Vietnam benefits from preferential access to the EU market under the EU?s General System of Preferences (GSP), which lowers import duties below the most favoured nation rate.