The European Union and Vietnam recently announced that they have started free-trade negotiations. This is another step the European Union has taken to secure new markets following signing agreements with South Korea, Peru, and Colombia.
Vietnam offers a large market. The country is with a population of 86 million people and a $100 billion economy. There is much trade between Vietnam and the EU already including products such as cars, wine, cheese, and pharmaceuticals.
What does it mean for Vietnam?
A bilateral trade agreement between the EU and Vietnam would give the Asian country an opportunity to lure manufacturers away from China as it has become too expensive there. Also, it would expand Vietnam's export portfolio. Currently the EU has imposed antidumping tariffs on Vietnamese shoe exports which would be lifted if a trade agreement is made.
The European Parliment will be considering the pros and cons of the potential agreement. One thing that it will be considering is what the agreement would mean for Vietnamese and European companies competing in the same industries. Another issues is the intensified dissent in Vietnam due to the economic crisis. Lastly, many are worried that Vietnam is too reliant on exports and the country's economy has been faced with challenges lately.