Vietnam, EU to negotiate bilateral free trade pact

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Vietnam and the European Union on Tuesday agreed to start negotiating a bilateral free trade agreement following a meeting between Prime Minister Nguyen Tan Dung and the EU Trade Commissioner in Hanoi. 

EU and Vietnamese officials will now work together on a framework for the talks to reach an FTA, officials said.

EU Trade Commissioner Karel De Gucht said at a press conference in Hanoi prior to the meeting that negotiations on FTA would "greatly contribute" to resolving the EU antidumping duties on Vietnamese footwear, which was extended for 15 months at the end 2009.

According to the EUs trade commissioner, the anti-dumping duties were "imposed as a result of an inquiry" with clear evidence.

With regard to achieving the EU's five criteria to determine whether a country deserves graduation to the market economy status, De Gucht said Vietnam has made some progress on two criteria but more improvements are needed in areas such as corporate governance, property laws and independence of the financial sector.

The EU is seeking bilateral talks on trade agreements with the 10 ASEAN member nations rather than negotiating as a bloc due to "different level of economic developments" in the region, De Gucht said.

He applauded Vietnam's progress in poverty reduction, citing the rate of 13 percent in 2009.

"It's clear proof that economic development adds much more to poverty reduction than help from ODA," he said.

De Gucht is expected to launch official FTA negotiations with Singapore on Wednesday.

Annual bilateral trade between Vietnam and EU reached $US 16.1 billion in 2008. Vietnam is the EU's fifth largest trading partner.

Reported by Huong Le

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