European Union External Action

EU Statement at the Trade Policy Review of Viet Nam, 27 April 2021

Geneva, 27/04/2021 - 00:00, UNIQUE ID: 210427_6
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Statement delivered by Ambassador João Aguiar Machado

On behalf of the European Union, I would like to welcome the Delegation of Viet Nam led by Mr. Tran Quoc Khanh, Deputy Minister of Industry and Trade. I would also like to thank the WTO Secretariat and the Government of Viet Nam for their reports, which form the basis for our discussion today. Let me extend also our appreciation to the Discussant, H.E. Mrs Monique T.G. Van Daalen (Netherlands) for giving us her views on the country’s main trade features.

 

Ms Chairperson, the EU welcomes this opportunity to discuss developments in Viet Nam’s trade policies and practices since its first WTO Trade Policy Review in 2013.

 

Vietnam is a dynamic emerging country and has become one of the EU's main partners in Southeast Asia. The impact of the COVID-19 pandemic on trade is being felt across the globe, and Viet Nam is no exception.

 

Since 1986, impressive reforms have been carried out towards a more market-oriented economy; with further transformation still ongoing. EU-Vietnam relations have developed significantly, which the recent EU-Viet Nam trade agreement is further consolidating. EU-Viet Nam trade flows have increased exponentially from 2014 to 2018, from 24,9 bn euros to 42,8 bn euros, respectively, making Viet Nam the second biggest trading partner in ASEAN. (The year 2019 has reconfirmed this trend with a trade balance of 45,5 bn euros).

 

During the period under review, Viet Nam’s economy has been strong, with an average annual GDP growth of 6.6 % between 2014 and 2018. Robust domestic demand, export-oriented manufacturing and foreign direct investment have supported Viet Nam’s economic transformation and expansion. The services sector is the main contributor to both GDP (about 46% in 2019) and employment (about 35% of the labour force), while manufacturing activities are growing and agriculture, forestry and fishing activities remain important.

 

The EU commends Viet Nam's strong commitment to the multilateral trading system. The EU welcomes Viet Nam's ratification of the Trade Facilitation Agreement in 2015 and the amendment of the TRIPS Agreement in January 2017. We also note some positive developments toward a more stable and sustainable business environment with Viet Nam’s revision of the Enterprise Law, the Investment Law and the adoption of a new Investment framework for public-private-partnerships (PPPs). The EU encourages Viet Nam to consider becoming a Party to the plurilateral Agreement on Government Procurement.

 

In the WTO, in addition to the multilateral negotiations on fisheries subsidies, the EU works with Viet Nam on micro, small, and medium-sized enterprises. The EU calls on Viet Nam to participate in the Joint Statement Initiatives on e-commerce, investment facilitation for development, and domestic regulation in services, which constitute an important and forward-looking agenda for international trade and WTO.

 

With reference to our bilateral relationship, the EU-Vietnam Framework Agreement on Comprehensive Partnership and Cooperation (PCA) marked the EU's commitment to strengthen and broaden the scope of the mutually beneficial partnership with Vietnam (entered into force in 2016). For years, Viet Nam has benefited considerably from the EU's Generalised Scheme of Preferences (GSP), which has facilitated expansion of Vietnamese exports to the EU market. Recently, the EU and Viet Nam Trade Agreement entered into force on 1 August 2020 and an Investment Protection Agreement was signed in 2019. The broad scope of the trade agreement leads to a strengthened co-operation between the EU and Vietnam in a very high number of areas. We also work closely with Viet Nam in the context of the EU-ASEAN Cooperation Agreement with the goal to ensure an effective environment for trade and investment relations.

 

The EU would also like to highlight a few challenges, some related to the questions we addressed earlier. The EU encourages Viet Nam to continue on the path to reform its state sector. We attach importance to a transparent and accelerated process where state-owned enterprises after being transformed, can and will function in heed to market forces on an equal footing with other economic operators.

 

We also call on Viet Nam to ensure that pharmaceutical products, which account for an important part of the EU trade flows with Viet Nam, can be placed on the Vietnamese market in conformity with international standards.

 

In addition, we encourage Viet Nam to strengthen its attempts to combat fraud, corruption and illicit trade.

 

Finally, on behalf of the EU, I wish the delegation of Viet Nam a successful TPR.

Thank you.

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