Vietnam Currency Discussion Board

[RICK C]

EU to recognise Vietnam having market economy if …
23:48' 05/10/2007 (GMT+7)

Ms. Corien Wortmann Kool

VietNamNet Bridge – Corien Wortmann Kool, Vice Chairwoman of the European Parliament International Trade Committee, on a working visit to Vietnam, had a talk with the local press Thursday, October 4.



Could you talk about the goal of your working visit to Vietnam this time?



We want to learn about the prospects of reaching a free trade agreement (FTA) between the EU and ASEAN.



Our agenda is working with two nations, Singapore, which is currently the Chairman of ASEAN, and Vietnam, the coordinator.



Coming to Vietnam this time, we want to get some more information, new research on the way of approach and Vietnam’s interests in the FTA negotiation process.



I want to make clear that the EU-ASEAN Free Trade Agreement that we are building is with only seven member nations of ASEAN, excluding Laos, Cambodia and Myanmar. Laos and Cambodia have their own trade deals with the EU while we plan to put an embargo on Myanmar.



What do you think about progress and limitations of Vietnam in promoting the above agreement and its efforts to integrate into international trade?



This is the first trip of the EU Congress to promote the FTA. Though we have been in Vietnam for just two days, we have marked a lot of progress in Vietnam.



Vietnam’s accession to the World Trade Organisation (WTO) last January announces all developments of this country. We recognise Vietnam’s efforts to perform its commitments since becoming a WTO member.



However, it doesn’t mean that Vietnam doesn’t have limitations. In the last two days, we have realised some issues related to the law that Vietnam needs to adjust or better execute.



At yesterday’s meeting, we received complaints from the community of European businesses in Vietnam. They said that some commitments dating back to 1995 had not been realised, especially issues associated with enterprise ownership.



They also complained about the protection of intellectual property. In Vietnam there are many legal documents about this field but the implementation is inconsistent, causing controversies between management agencies and businesses.



Of the seven ASEAN countries that are participating in the EU-ASEAN FTA, Vietnam’s economy is at the lowest level of development. What difficulties will the country face in this integration?



I think this is not a big problem. As a newly emerging economy, Vietnam will benefit a lot when the agreement is signed.



Joining FTA, the important thing is not whether the economy is developed or is developing but the efforts of that nation towards the integration process, particularly its efforts in administrative reforms, creating open and transparent business and investment environment.



The EU doesn’t recognise that Vietnam has a market economy. What should Vietnam do to gain this recognition from the EU?



Vietnam has become a member of WTO. However, due to some restrictions related to laws, regulations on foreign investment, etc. so the EU cannot recognise Vietnam as having a market economy yet.



The biggest barrier of Vietnam at present is the problems associated with its laws and law enforcement. The most outstanding issue is the implementation of intellectual property projection. This is the biggest problem that we see in Vietnam.



Another issue that makes the EU not recognise that Vietnam has a market economy is the discrimination of ownership between local and foreign companies. Vietnam’s laws still have some unequal regulations on foreign companies in Vietnam. This is an unacceptable thing in a market economy.



If in the coming time, the Vietnamese government has more positive changes in the issues related to administrative reforms, rubbing out discrimination, simplifying investment and trade formalities, etc. the EU will recognise Vietnam as a country with a market economy.



How will the EU- ASEAN FTA influence the trade relations between the two sides and what will be the benefits for Vietnam when the FTA is signed?



With 27 EU member countries and 7 ASEAN member nations, a huge market with nearly 1 billion consumers will be created. This will be an extremely great opportunity for all participants, including Vietnam.



Research projects by CEP II and Copenhagen Economics released in April 2007 show that after the FTA is signed, ASEAN can see a growth of exports to the EU by 18.5% while the EU’s exports to ASEAN will rise by 24.2%.



Vietnam and other members of ASEAN will benefit most from FTA. This will be a chance for Vietnam to deeper infiltrate into the EU market and it will create favourable conditions for Vietnam to become a developed country by 2020.