EU nations ready to support ASEAN in green development, source freepik.com

More than a week ago, representatives of leaders from the EU and ASEAN held the 29th EU-ASEAN Joint Cooperation Committee Meeting online.

Besides pledging to further cement their cooperation in many sectors, both sides emphasised the need for a robust socioeconomic recovery from the pandemic that would enable ASEAN and the EU to build back better, greener, and in a more sustainable, inclusive, and resilient manner, including through implementation of the ASEAN Comprehensive Recovery Framework and also the EU Recovery and Resilience Facility.

“Both sides underlined the strategic importance of their economic partnership and recognised efforts to further increase and strengthen 2-way trade and investment flows between ASEAN and the EU that can support the regions’ comprehensive recovery process, particularly for micro, small, and medium-sized enterprises,” read the joint press release at the event. “Officials look forward to the adoption of the Trade and Investment Work Programme for 2022-2023 at the 18th AEM-EU Trade Commissioner Consultation in 2022.”

This new programme, following the first version for 2020-2021, will handle trade and investment obstructions between both sides, with high-level policy dialogues; consultation at the senior economic official level; enhancing dialogue with businesses; and cooperation activities that include various projects.

The new programme is expected to focus on developing the framework and parameters of a future ASEAN-EU free trade agreement (FTA). The bloc is set to resume FTA talks with the EU after negotiations were suspended in 2009.

At the time, the EU instead decided to pursue bilateral FTAs with Singapore and Malaysia, Vietnam, Thailand, the Philippines, and Indonesia between 2010 and 2016. FTAs are in effect with Singapore and Vietnam, while negotiations are continuing with Indonesia, and the rest are on hold.

According to preliminary data, in 2020 the total bilateral merchandise trade between ASEAN and EU hit $226.2 billion, accounting for 8.5 per cent of the former’s total merchandise trade, while the total foreign direct investment flows from the EU into ASEAN amounted to $10 billion, which placed the EU as the second-largest external source of such investment among ASEAN’s partners after the US.

Giorgio Aliberti, Ambassador and head of the European Union Delegation to Vietnam, said that since August 2020, the EU’s exporters and investors are now on a par with those nations that had already concluded FTAs with Vietnam. Vietnam-EU trade turnover in January hit nearly $5 billion, with Vietnam earning $3.6 billion from exports – down 1.3 per cent on-year and spending $1.39 billion on imports – up 4.3 per cent on-year.

Last year, both sides’ total trade values stood at $56.8 billion, including $39.9 billion worth of Vietnam’s exports – up 13.5 per cent on-year, and $16.9 billion worth of Vietnam’s imports – up 15.5 per cent on-year.

“For Vietnamese traders, the benefits after more than one year implementing the EVFTA were even higher. Marketwise, the EVFTA allows Vietnamese exporters to access more than 450 million European consumers whose disposable incomes top the world,” Aliberti said. “Since the enforcement of the EVFTA, around 85.6 per cent of all tariff lines have been eliminated fully for Vietnamese commodities. This represents 70.3 per cent of Vietnam’s total exports to the EU. Such progressive elimination of import duties explains the 20 per cent year-on-year surge of Vietnam’s exports to the EU.”

According to Vietnam’s Ministry of Planning and Investment, investors from 25 EU member states have registered more than $22.2 billion for about 2,230 projects in Vietnam.

During the European Commission’s vice president Frans Timmermans’ February 17-19 visit to Vietnam, he announced that the EU will provide the Southeast Asian country with a maximum grant of €210 million euros ($238 million) as non-refundable aid for Vietnam for the 2021-2024 period to consolidate and realise their bilateral cooperation in a number of prioritised areas.

This $238 million aid is part of the EU’s Multiannual Indicative Programme that concretises the cooperative relationship between the EU and Vietnam, enabling the two sides to work together on programmes and projects built on common goals, principles, and values.

The aid is also intended to boost the EU’s cooperation with Vietnam in three priority areas – climate-responsive digital circular economy, responsible entrepreneurship and enhanced skills for decent employment, and strengthening governance, rule of law, and institutional reform.

“The EU stands ready to continue supporting Vietnam’s green transition and seeks deeper cooperation with Vietnam in climate areas to help realise the country’s COP26 commitments,” Timmermans said.

Alain Cany, chairman of the European Chamber of Commerce in Vietnam, has also been working with the Vietnamese government and ministries to lift trade and investment ties, supporting the country to develop into a green economy benefiting all. “Rising sea levels are already having a large impact on the Vietnamese people,” Cany said. “A 100cm sea-level rise is predicted to put half of the Mekong Delta underwater. This would clearly have a massive economic impact, destabilising an extremely dynamic country in one of the world’s most energetic regions.”