Shoes being manufactured at HCM City-based Pou Yuen Viet Nam Co.,Ltd. Garments and textiles, footwear and food processing sectors will benefit most from the EU-Viet Nam free trade agreement (EVFTA), according to a report. – VNA/VNS Photo Thanh Vu

HCM CITY (VNS)— The EU-Viet Nam free trade agreement (EVFTA) should be considered alongside other agreements to evaluate the opportunities and challenges, thus aiding the renovation of Viet Nam's growth model, economists stated.

Experts at a seminar held yesterday in the HCM City remarked that Viet Nam wanted to spur exports and lure more investments through the agreement in order to open itself up to the region and the world.

However, they are concerned about non-tax measures imposed by the EU and suggested that Viet Nam should seek more consultations before arriving at decisions regarding the EU regulations, while enhancing its capacity to fulfil new requirements.

The EU procedures should be publicised among businesses interested in the ongoing negotiations in a bid to accelerate exports and raise competitiveness, they emphasised.

Pham Thi Lan Huong, an expert on the European Trade Policy and Investment Support Project (EU-MUTRAP), proposed that Viet Nam should increase its import of machinery, equipment, and materials from the bloc to garner advantages of its high technology.

Apart from the tax advantage, it was necessary for Viet Nam to pay more attention to the agreement's impact on attracting foreign investment, heightening production and business capacity, and generating jobs, she remarked.

Le Trieu Dung, the deputy head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, noted that most of the agreements that Viet Nam had signed only focussed on tax reduction and commercial priorities rather than the renovation of the growth model or the improvement of the business environment and economic efficiency.

Claudio Dordi, the technical assistance team leader of EU-MUTRAP, pointed out that the EU was placing more importance on issues, such as the origin of products, intellectual property rights, competitiveness policies, and the recognition of product quality. The EU also laid emphasis on the settlement of disputes in the trade agreements it signs with other partners. The bloc also emphasizes the importance of sustainability and environmental factors in such agreements, he reported.

Truong Dinh Tuyen, the former minister of trade and currently an expert from EU-MUTRAP, stated that the EVFTA was a comprehensive and high-quality agreement that met the standards set by the World Trade Organisation (WTO).

In addition to goods, services, and technical barriers, Viet Nam's commitments will also target investment, government procurement, sustainable development, and renewable energy, he explained.

A report released by the EU-MUTRAP revealed that the EVFTA is expected to promote investment and technological renovation, thus increasing productivity while expanding the service sector.

Garments and textiles, footwear and food processing sectors will benefit most from the pact, the report pointed out. However, whether the exports will increase or not will depend on the level of improvement in the production capacity.

The 28-member EU market has a gross domestic product (GDP) of about US$18 trillion, making up 22 per cent of the global figure.

The bloc's total outbound investment accounts for nearly 40 per cent of the global FDI, while it receives 20 per cent of foreign investment.

Viet Nam's export turnover to the bloc, which is the country's leading importer, grew about 15-20 per cent on average every year.

The EU is also Viet Nam's second-largest official development assistance (ODA) provider and the country's largest non-refundable aid supplier. Between 2007 and 2013, the bloc provided $5.2 billion in ODA to Viet Nam, of which 43 per cent was non-refundable aid. — VNS