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The Vietnam-EU trade pact can diversify export markets and help reduce reliance on China and the U.S., experts say. On October 17, the European Commission submitted the EVFTA for signature and conclusion to the European Council. Once authorized by the Council, the agreement will be signed and presented by the end of this year to the European Parliament for ratification. The European Parliament is set to ratify the EVFTA early next year.
The trade pact, which has been negotiated since June 2012, is considered a game changer as it would eliminate almost all trade tariffs between the two sides.
Luu Bich Ho, former head of the Vietnam Institute for Development Strategies under the Ministry of Planning and Investment, said that the deal would play a major role in reducing Vietnam’s reliance on the U.S. and China, the world’s two largest economies.
“This is obviously an opportunity for Vietnam to increase export [to the EU] to avoid being affected should the U.S. seek to limit imports from Vietnam,” Ho said.
It’s also a chance for Vietnam to diversify its markets as it is still heavily dependent on China in trade, he added.
In the first nine months this year, the U.S. was Vietnam’s largest export market, accounting for 19.5 percent of Vietnam’s total exports, a growth of 13.2 percent year-on-year, according to Vietnam Customs.
Although the EU came second and accounted for 17.4 percent, this market has the smallest growth rate among Vietnam’s top six export markets at 10.5 percent.
China was the third largest export market, had the highest growth rate of 29.9 percent. It was also Vietnam’s largest import market, accounting for 27.3 percent of Vietnam’s total imports.
