The European Union and Vietnam announced the start of free-trade negotiations on 2 March, signalling a major effort to move ahead in the race to secure new markets despite the failure of the Doha Round of global trade talks.
EU officials say they want a privileged trade and investment relationship with Vietnam, a booming country with 86 million people and a USD100-billion economy that is open to buying European cars, wine, cheese and pharmaceuticals. For Vietnam, a free-trade deal with the EU would be a chance to lure manufacturers away from China with the promise of a launching pad into the EU’s roughly USD15-trillion economy – the world’s largest.
Vietnam’s biggest exports are textiles, shoes, seafood and coffee. A free-trade deal with the EU could expand that portfolio. "Vietnam is looking to attract manufacturing that has become too expensive in China," says Fredrik Erixon, a trade analyst with the European Centre for International Politics and Economy, a Brussels-based think tank. A trade treaty would end the anti-dumping tariffs on Vietnamese shoe exports that the EU imposed in 2006 and extended in 2009. The announcement also comes at a critical juncture for Vietnam, whose economy faces steep challenges despite relatively strong growth over the past year.