Vietnam to become gateway for EU products in Southeast Asia

By VnExpress   November 4, 2016 | 08:30 pm GMT+7
Vietnam to become gateway for EU products in Southeast Asia
Da Nang Port in Central Vietnam. Photo by VnExpress/Nguyen Dong

The landmark trade deal is the first the E.U. has signed with a developing country.

When the free trade agreement between Vietnam and the European Union takes effect next year, Vietnam will eliminate more than 90 percent of its import tariffs over a period of 10 years on E.U. products ranging from cars and pharmaceuticals to foodstuff, the government’s online news portal reported, citing Phil Hogan, European Commissioner for Agriculture and Rural Development.

Vietnam is the second country in the Southeast Asian region after Singapore with which the E.U. has reached a free trade agreement, Hogan told the media on Thursday at a press conference in Hanoi.

He stressed that the agreement is the first between the E.U. and a developing country.

Since the deal will remove Vietnam’s tariffs on about 170 billion euros ($189.3 billion) worth of annual imports from the E.U., the country is expected to become “the regional distribution center”, said Hogan.

The European Commission’s forecast is not groundless as the trade relationship between Vietnam and the E.U. has grown rapidly and will grow faster following the bilateral free-trade accord.

“Vietnam is one of the growing markets and we’ve seen a very positive development with our trade relationship with that country,” Michael Pulch, E.U. Ambassador to Singapore, said in an interview with Bloomberg. That growth along with the conclusion of the free trade pact “points to a dynamic trade relationship in the future”, he added.

Total trade between the E.U. and members of the Association of Southeast Asian Nations (ASEAN) rose 12 percent last year, according to E.U. data.

Following the newly-signed agreement, the E.U. is also looking at Vietnam as a gateway for small and medium-sized companies in Europe to enter the Southeast Asian market.

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