Yesterday, the EU agreed with Vietnam another FTA with an Asian country. The final legal text should be available after the summer break. It is the second FTA the EU concludes with an ASEAN (Association of Southeast Asian Nations) country after Singapore and will clearly increase its footprint in the region.
This is an important next step for EU exporters to expand trade activities in ASEAN, mainly in the field of machinery and appliances, motorcycles, car parts, textile fabric, pharmaceuticals and chemicals. Depending on the tariff lines, preferential treatment will be available for a large part of tariff lines. Some of the above-mentioned industries will get partial duty elimination over a period of 7 years for the EU and up to 10 years for Vietnam.
Aside from tariff elimination, reduction in non-tariff barriers to European exports, protection of European Geographical Indication, Government Procurement, Intellectual Property Rights, are topics of the agreement.
What does this mean for Switzerland? We are optimistic that the successful negotiations between the EU and Vietnam will boost the talks between Switzerland (EFTA) and Vietnam since both agreements should cover similar topics. It may also be an opportunity for Switzerland to leverage on the content of the EU – Vietnam FTA to be better placed for future discussions.
The EFTA-countries have finished their 12th round of negotiations with Vietnam about two months ago; the next round will take place in October 2015. The negotiations should have been concluded by the end of 2014.
Vietnam is an interesting entry point to ASEAN and its participation in the TPP (Trans-Pacific Partnership) negotiations will strengthen its position as a trading partner. However, it is important for Switzerland to increase its footprint in Asia / ASEAN, since it is not participating in the TPP talks. Negotiations with Malaysia is still in its starting phase, similar for the Philippines, with Thailand, the talks are suspended, and negotiations with Indonesia are on hold since the change in government.
Remember: Switzerland has currently FTAs with various partners in Asia, such as Japan, Hong Kong, Singapore, China and South Korea (some under the EFTA framework, some bilateral). It is therefore important for Switzerland to increase its FTA network to stay competitive and to raise business opportunities for Swiss companies.
Further details about EU-Vietnam FTA available here: http://europa.eu/rapid/press-release_MEMO-15-5468_en.htm?locale=en