The European Union and Vietnam will start negotiations on a free trade pact soon, EU and Vietnamese leaders said, fuelling Vietnamese hopes of being recognised by the EU as a free market economy.
Vietnamese Prime Minister Nguyen Tan Dung said free trade talks should also lead to an end to contentious EU import duties on Vietnamese-made shoes and greater access for Vietnam to the EU’s consumer markets under the EU’s Generalised System of Preferences for developing states.
“With the result obtained today, the recognition by the European Union of Vietnam as a market economy ... will be agreed soon,” the Prime Minister told journalists after a meeting with Jose Manuel Barroso, President of the EU’s executive Commission.
Like China, Vietnam has long pushed the EU to recognise it as a free market economy, a move which would boost Vietnamese business with the 27-member bloc. But trade talks may take years to complete, making a rapid change in economy status unlikely.
China graduates to market economy status automatically in 2016, ending years of refusal by the EU.
The EU and Vietnam will launch free trade talks “as soon as possible”, Barroso said.
The two leaders met on the first day of a two-day summit of EU and Asian heads of state, which will address global financial governance issues, IMF voting rights, security issues, climate change and international trade.
Since talks for a global trade accord stalled at the World Trade Organization in 2006, the European Union has pursued bilateral trade accords, notably with Asian trading powers.
The bloc will this week sign its first bilateral free trade pact—with South Korea—and hopes to seal a deal with India this year.
With efforts frustrated for a regional trade accord with the ten-state Association of Southeast Asian Nations, the EU is considering individual pacts with Vietnam, Singapore and Malaysia. (Reuters)