International Economic Relations

Instructor:

Nguyen Kim Thao,

Class: Foreign Trade 1 Course: 35

MBA

Group Members: 1. Nguyen Thi Thuy Diem 2. Dao Thi Hanh Dung 3. Nguyen Ngo Tinh Giang 4. Luu Tieu Yen
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WELCOME TO OUR PRESENTATION

Topic:

FTA between EU VN
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Contents
I EU VN overview

II

Scope of the negotiated FTA EU-Vietnam

III Opportunities and Challenges to Vietnam

I/ EU Vietnam overview
1/ EU introduction

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I/ EU Vietnam overview
2/ EU VN relations

GSP

2014, VN still receives 10/2010 signed PCA VN GSP EU 02/03/2010 started FTA negotiation 2005 signed agreement on market access 17/07/1995 Framework Cooperation Agreement VN EU in Bruselles 1/1/1995 EU started the approval of the GSP for VN

4/21/12 22/10/1990 officially establish diplomatic

I/ EU Vietnam overview
3/ The process of economic cooperation
a. Commercial relation

EU is the 4th largest importer of Vietnam in 4/21/12 2009.

EU is the 2th largest export market of Vietnam

EU is a very important major trade partner of VN

Source:

Vietnam's export in 2009

Vietnam's import in 2009

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I/ EU Vietnam overview
3/ The process of economic cooperation
a. Commercial relation
12 10 8 6 4 2 0

Unit: billion USD

Vietnam always has a trade surplus from 2007-2010 4/21/12

I M P O R T

E X P O R T

TRADE IN GOODS VIETNAM WITH EU 27

7 months in 2011 VN IM from EU: 4 billion USD EX to EU: 8.8 billion USD

Source: http://www.customs.gov.vn http://trungtamwto.vn

I/ EU Vietnam overview
3/ The process of economic cooperation
a. Commercial relation

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I M P O R T

E X P O R T

Source: http://trungtamwto.vn

I/ EU Vietnam overview
3/ The process of economic cooperation
b. Direct investment FDI commitments ODA commitments to Vietnam in VietNam 2009 2010 2011 2009 2010 2011 726.6 4,919.3 135.25 893.49 1,082.32 774.69
EU is the second largest partner (after ASEAN) have FDI in Vietnam, with 2.25 billion USD, accounting for more than 12% of the total FDI into Vietnam in 2010.
Source: http://www.mofa.gov.vn Unit: million USD

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In 2010, EU is the fourth largest donor with about $1.4 billion, after the WB($2.498 billion), Japan ($1.64 billion)

I/ EU Vietnam overview
3/ The process of economic cooperation
c. ODA

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Contents
EU VN overview

II

Scope of the negotiated FTA EU-Vietnam

III Opportunities and Challenges to Vietnam

The inconsistency in the negotiating process

EU Trade Commissioner Karel De Gucht

Prime Minister Nguyen Tan Dung

March 2010
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I do not understand why up to now the agreement has yet to reach any specific achievement

Vietnam and EU has disagreed on the way to access the agreement

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Mr. Jean Jacques Bouflet, EU Minister Counselor in Vietnam

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11/5/2011

Mr. Nguyen Canh Cuong Deputy Head of European Market Department, Ministry of Industry and Trade

II/ Scope of the negotiated Main FTA EU-VN

issues
EU import Vietnam import

Tariff Barrie rs

Rules of Origin Technical Barriers SPS

the Agreement on the Application of 4/21/12 Sanitary and

Nontariff

II/ Scope of the negotiated 1/ Tariff FTA EU-VN

Barriers

Fields Textile and garment Footwear Aquaculture

IN 2009 Current EU import tariff rate

( n 12.4% (dumping: 17% - until 95% 0 31/3/2011) o9 T s ct10.8% Source: trungtamwto.vn odu r p

0% 12% rly ) a e

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II/ Scope of the negotiated FTA EU-VN IN 1/ Tariff

Barriers

2011

Current Vietnam Fields ) import tariff rate arly Steel and Iron( ne % 7% ~ 15% 95 Aero planes 0.0% 0 9 To ts c77%~83% (depend) Automotive industry odu pr Electronic industry 8.9%

0%

Source: SGGP, Customs Union

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m 2018 :

commitme nts under the CEPT

confirm ed tentative

The violent competition of car importing from ASEAN countries, especially since 2015

Need to have a competitive price and cost

II/ Scope of the negotiated 1/ Tariff FTA EU-VN

Schedul The schedule of EU and Vietnam is much different e

Barriers

EU: 3 5 years VN: 10 15 years

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II/ Scope of the negotiated Quality management system ISO 9000 is almost a 2/ Non-tariff mandatory requirement for FTA EU-VN enterprises in developing Barriers
Quality

rr o ba s t e r ad 4/21/12 tr

countries which export goods to the EU market. The food processing companies must comply with strict Hygiene hygiene standards. food Ex: HACCP - Hazard Analysis TheProducts related to goods EU market require the health the environment Point relating to of consumers must Safety for Critical Control codes as to the EU have must be their Commission (EC) Consumer Europeanlabeled according to regulation. regulations (eco-labels, prohibits importing goods whose s Ex: CE mark - "Conformit recycled labels) and have manufacturing processes use any TBT Click to edit Master subtitle form of forced labor such as certificates which are Environm styleEuropenne" ("European Conformity") internationally recognized. Ex: prison labors, children labors .... ental GAP , ISO the Geneva convention protectio defined in 14000 on 25/9/1926 - 7/9/1956 and the ni n International Labor Agreements Labor ch l e a e T c i standards No. 29 and 105

r, it weve Ho that eems s NOT e will ther y TBT E an HAV r SPS o ction. redu

Deputy Director of MoLISAs (B L-TBXH) Department for International Cooperation, Mr. Nguyen Kim Phuong said: Vietnam has not yet signed any bilateral or multilateral labor standards are considered agreements a new articles Vietnam in its with issue for on labor standards FTA negotiations.

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High recommend from experts: Have clear terms in the negotiation Improve national labor law

Before Vietnam joined WTO 2007, EU had applied quota and high anti-dumping import tariff on some important export products of Vietnam as an non-market economy. After joining WTO, Vietnam has been abolished and reduced a significant tariff rate on almost products.
Lawyer Olivier Prost, Branch Manager law firm Gide Loyrette Nouel EU (Gide) in Belgium claims that FTA negotiations are not meant to eliminate the trade remedies. However, the FTA provides Vietnam with an opportunity to be recognized as a market economy. This is a "passport" to help us to easily overcome the barriers to trade in the EU market in particular and the world in general. Because most commercial protective cases now come from the 4/21/12

II/ Scope of the negotiated 3/ Priorities in FTA EU-VN

Services

Services

exporting services accounted for 40.8% of world market share. Import Require us
EU is world leader of

32.7%

Focus mainly on Banking, Finance, Tourism, and Insurance, Big distance in developing 4/21/12 aspect

open service market

Short summary clip

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Contents
EU VN overview

II

Scope of the negotiated FTA EU-Vietnam

III Opportunities and Challenges to Vietnam

III/ Opportunities and Challenges

1/ Opportunities:

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1. Opportunities
According to Truong Dinh Tuyen (former Vietnamese Minister of Trade), signing FTAs with EU, VN will have opportunities to import high-technology and materials with low price

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Expanding export
211 million

Reducing tariffs from 12% to 0%

285 million

233 million

The elimination of tariffs by the EU would produce an increase of export of the five most exported products mentioned above, on average, of more than 20%. 166 million

207 million

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1. Opportunities

Increase investment

High income (26 million USD/year)

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III/ Opportunities and Challenges

2/ challenges:

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2. Challenges
Technical Barriers

The REACH Regulation places greater responsibility on industry to manage the risks from chemicals and to provide The European Community safety information on the substances. Regulation on chemicals and their safe use (EC 1907/2006).

REA CH Che mical Law

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Registration release their Business can Evaluation information Authorisation tradeRestriction of and and secrets Chemical substances. Business have to pay high cost The law entered into force on 1 June 2007.

2. challenges
Technical Barriers

The regulation aims to prevent Illegal, Unreported and Unregulated fishing (IUU)

IUU
regulation
(Entered into force on 1 January 2010)

Aim to trace the origin of good quality seafood products

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Aim to ensure that fishing operations are conducted on a more sustainable and responsible basis.

Technical Barriers

gross Registeration Fishermen are unwareregister of IUU number tonnage

Fishermen and businesses are now required to provide clear The fishing industry is not yet Vietnam will details and comprehensiveface and name type of developed on a large scale of manycertificates difficulties fishing vessel vessel

IUU
regulation
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Fishing skills are still limited Type of fishing methods

2. Challenges

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Lack of competitive Brands

Affect negatively the environment

According to Le Danh Vinh, exports growth in recent period is not sustainable, value of exports is still low because enterprises mainly based on exploitating the natural resources.

Exports development policies which is too focused on the quantity, make the natural resources become exhausted
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Close relationship in export and import. Cooperate for two-side benefits. Up to now, although there wasnt any negotiated round, it is expected to rocket the growth rates

Summary

3 main issues in FTA Tariff rate will be reduced to 0% applied for 9095% products after signing. TBTs: difficult to satisfy => VN have to try our best => difficulty for enterprises EU is extremely interested in services category. However, our countrys improvement in this is 4/21/12

PREDICTIONS FROM EXPERTS:

Variable National Income Export Import Balance of Trade GDP Government and Individuals Expense Price Salary Results (estimated) + 26 Million USD / year + 4% to + 6% / year + 3.1% (Electronics: +2.7%, chemical, + 2.5%, pharmaceutical: +3%) + 500 million USD / year + 2.7% / year + 2%. significant decrease dramatical increase

Author: Professor Claudio Dordi Professor of International Law at Bocconi University (Milan) 4/21/12 Federico Lupo Pasini: Lawyer and consultant specialized in

Thank you for listening *****THE END*****

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