EU trade deal will help Vietnam exports: Fitch

The signing of a free trade agreement (FTA) between the European Union and Vietnam will bring significant long-term macro-economic benefits for Vietnam, Fitch Ratings said.

Processed shrimp for export (Source: VNA)

"The deal would help to boost foreign investment, productivity and exports, strengthening potential growth and external accounts," Fitch said in a report released this week.

The agreement will eliminate almost all tariffs over a 10-year transition period, with most tariffs being removed once the agreement comes into effect.

The agreement will also open up parts of the Vietnamese services sector – including financial services – to European investment.

Fitch said Vietnam was already benefiting from strong external balances and relatively high real GDP growth rates. The average real GDP growth in the 2010-14 period was 5.9 percent, versus a ‘BB' country median of 4.5 percent, while Vietnam posted a current account surplus of 4.5 percent of the GDP in 2014 versus a peer median deficit of – 1.3 percent. External accounts are further strengthened by strong and stable FDI inflows, with the net FDI totalling 3.9 percent of the GDP (US$ 7.2 billion).

"The European Union countries, together, are Vietnam's second-largest trading partner after China, with Vietnam benefiting from a substantial goods trade surplus with Europe. Further lowering of trade and investment barriers should help support Vietnam's rapidly growing exports sector, and promote further FDI inflows," Fitch said.

Vietnam's exports to the European Union were reportedly worth US$27.9 billion in 2014, up by roughly 15 percent from 2013.

"Notably, too, Vietnam remains in the negotiations for the Trans-Pacific Partnership (TPP) free trade agreement with 11 other Pacific Rim countries, including the United States and Japan. Should the TPP be passed, Vietnam will have concluded free trade agreements with three of its top four export destinations."

Fitch expects Vietnam's improved macroeconomic stability and external accounts to remain a key support for its sovereign credit profile.

Source: VNA

Other news

Most view

185 leading domestic & in't enterprises join in VN ETE 2018

185 leading domestic & in't enterprises join in VN ETE 2018

The Vietnam Exhibition of Electrical Technology and Equipment (Vietnam ETE 2018) and the Exhibition of Products, Technologies for Energy Saving and Green Power (ENERTEC EXPO 2018) yesterday kicked off in HCMC’s Saigon Exhibition Convention Center in district 7.

Banking-finance

VNPT & SeABank cooperate to enhance connections

The Vietnam Posts and Telecommunications Group (VNPT) and SeABank just co-signed cooperation agreement, aiming to develop the two sides’ economic, business and investment potential.


Self - introduction

VNPT targets to be leading digital service provider in Vietnam

The grand opening ceremony of the VNPT-Information Technology Company (VNPT-IT), a new member of the Vietnam Posts and Telecommunications Group (VNPT), was held yesterday in Hanoi. With thousands of IT engineers and the focus on developing state-of-the-art technological products related to Artificial Intelligence (AI), Bigdata, and Blockchain, the new company is considered the main force to help VNPT fulfill the goal of becoming a leading digital service provider in Vietnam and an important Digital Hub of the neighborhood as well as the world.

Stock market

SAS profits VND 118bln

The Southern Airports Service Joint Stock Company (Sasco) which is listed under code SAS on the Unlisted Public Company Market (UPCoM), announced its second quarter’s financial report with net revenue at VND 634.5billion, an increase of 14 percent compared to last year.