FTA welcomes EU-Vietnam trade deal, but raises concern on Rules of Origin

05-08-2015

Following the announcement of an agreement on free trade deal between the EU and Vietnam on 4 August, Christian Ewert, Director General of the Foreign Trade Association (FTA), welcomed the conclusion of the talks, since the deal will certainly boost bilateral exchange and bring substantial gains for European retailers sourcing from and investing in Vietnam.

The association has been a major driver in the process to promote an ambitious and prompt conclusion of the deal, which represents a major milestone for the EU, as the most ambitious and modern free trade agreement negotiated so far with a developing country. FTA believes that this will set a very positive precedent and will also bring the EU closer to the ultimate goal of reaching an inter-regional deal with ASEAN.

However, FTA has raised its concern on the rigid Rules of Origin scheme that the agreement contemplates. “While on the paper, 99 percent of all tariff lines will benefit from the elimination of duties, many European companies will not be able to take advantage of the deal because of its rigid rules of origin scheme. Today, most of the fabric for garment production is imported to Vietnam and not manufactured within the country as stipulated by the rules of origin of the deal. Consequently, clothing goods from Vietnam will very often not meet the requirements for preferences and will have to be imported under normal conditions. This is more than a cosmetic error”, stressed Mr. Ewert.

Mr. Ewert also praised the high level of ambition set by the EU and Vietnam to intensify dialogue and cooperation on sustainability aspects. In this sense, he commented: “we will seek to take an active role in the Domestic Advisory Group which is assessing the implementation of the sustainability chapter of the agreement”.

Read the full statement

 

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