Channel NewsAsia

Vietnam, EU hail progress on free trade agreement

Vietnam's prime minister on Monday (Aug 25) hailed progress in free trade talks with the European Union, saying a deal could be concluded as early as October.

HANOI: Vietnam's prime minister on Monday (Aug 25) hailed progress in free trade talks with the European Union, saying a deal could be concluded as early as October. Prime Minister Nguyen Tan Dung was speaking after meeting European Commission head Jose Manuel Barroso, who is in Hanoi to discuss issues including trade and security.

Dung told reporters the pair had held "open, candid talks" and called for a deepening of economic ties between Vietnam and the EU, including achieving "the goal of concluding FTA (Free Trade Agreement) negotiations by October 2014." Discussions were launched in 2012.

In 2013, EU-Vietnam trade was worth around €27.6 billion (S$46 billion). The EU is already Vietnam's largest export market and second largest trading partner after China. Vietnam exports mobile phones and other electronics, footware and textiles, and agricultural products including coffee, rice and seafood to the EU. The EU is also one of the largest foreign investors in Vietnam.

Barroso said there had been "good progress in (FTA) negotiations and I look at this agreement with great optimism." The FTA will boost employment and growth in both Vietnam and the EU and would help Vietnam with ongoing reforms of its state-dominated economy, Barroso said, adding he had discussed current tensions in the South China Sea with Dung.

Hanoi is locked in a bitter maritime dispute with Beijing over disputed waters and island chains in the South China Sea. In May, Beijing moved a deep sea oil rig into waters that Hanoi claims, setting off violent anti-China riots in Vietnam and triggering a high-seas standoff around the rig. Beijing removed the rig in July, claiming its mission has been successfully completed.

"The EU has high stakes in the region - trade and strategic interests, as well as energy and security dimensions," Barroso said. "The EU does not take a position on individual claims but we strongly encourage all partners to seek peaceful solutions in accordance with international law," he added.