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Rules of Origin may be a hurdle for EU-Vietnam FTA
06
Aug '15
Europe's Foreign Trade Association has put a question mark on the EU's trade and investment agreement with Vietnam. The agreement is the most ambitious and comprehensive free trade agreement (FTA) that the EU has ever concluded with a developing country.

In a statement, Christian Ewert, Director General of the Foreign Trade Association (FTA) welcomed the deal saying the agreement would certainly boost bilateral exchange in goods and services and would bring substantial gains for European retailers sourcing from and investing in Vietnam.

But he also raised a red flag over the agreement designed to bring the EU closer to the ultimate goal of reaching an inter-regional deal with ASEAN.

“There is, however, a discrepancy between theory and practice. While on the paper, 99 per cent of all tariff lines will benefit from the elimination of duties, many European companies will not be able to take advantage of the deal because of its rigid rules of origin scheme. Today, most of the fabric for garment production is imported to Vietnam and not manufactured within the country as stipulated by the rules of origin of the deal. Consequently, clothing goods from Vietnam will very often not meet the requirements for preferences and will have to be imported under normal conditions. This is more than a cosmetic error.”

Ewert said the Foreign Trade Association supports the high level of ambition set by the EU and Vietnam to intensify dialogue and cooperation on sustainability aspects.

“We will seek to take an active role in the Domestic Advisory Group which is assessing the implementation of the sustainability chapter of the agreement,” he said. (SH).

Fibre2Fashion News Desk – India

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