Union minister of state for textiles and Bareilly MP Santosh Gangwar has said that appointment of former cricketer ChetanChauhan as chairman of National Institute of Fashion Technology (NIFT) is the right decision and people would see the difference in the next three months. Talking to TOI, the minister said that even if Chauhan gives only 20% of his time to NIFT, it will be an achievement for the institute. After his appointment, Chauhan had said that he will devote 20% of his time to NIFT, 60% to DDCA (of which is the vice president) and 20% to his business. According to reports, the former cricketer runs a cricket academy and owns a printing press. "If Chauhan gives 20% of his time to NIFT, it will be an achievement for the institute as others (his predecessors) never gave even this much of time to the institute. The previous chairpersons used to come only four times in a year to attend meetings," Gangwar said. "The predecessor of Chauhan used to live in Goa and would come to Delhi only to attend meetings. However, after Chauhanjoined NIFT, he demanded an office as till now, all the chairpersons used to come only to attend meetings four times in a year and they never had an office here." The Board of Governors of NIFT was reconstituted in 2010 under Dayanidhi Maran, textiles minister in the UPA. Venu Srinivasan, chairman of TVS Motor Co and managing director of Sundaram Clayton Ltd, was appointed the chairman then. Gangwar said that he knew that people will feel bad after Chauhan was appointed the NIFT chairman, but he is not worried about it. "All the previous chairpersons of NIFT did not stay in Delhi, but Chauhan will stay in Delhi at his office and will monitor work in a better way. People will realise the difference in another three months," said he.
Explaining why Chauhan was considered the right choice for the post, the minister said, "NIFT is a reputed institution and a retired government employee used to be made its chairman till now. We decided to appoint a non-government employee for the advancement and success of this institute. He is a renowned cricketer, had been MP twice in the past and served as a bank officer for 24 years. He has had better exposure in the country and abroad." Notably, the NIFT Act, 2006, says the chairperson to the statutory body under the ministry of textiles is expected to be an eminent academic, scientist or technologist or professional to be nominated by the Visitor of the institute, who is the President of India. Gangwar added that apart from Chauhan, the NIFT board comprises 11 prominent members from varied background, including Sunil Sethi, chairman at Fashion Design Council of India, Ruby Yadav, former Miss Asia, Balkrishan Goenka, chairman of Welspun Group, and PK Gupta, chairman of Sharda Group of Institutions and chancellor of Sharda University. The board also has three MPs -- Rajya Sabha MP Kanimozhi and Poonam Mahajan and V. Sathyabama of Lok Sabha - as its members.
SOURCE: The Times of India
The textile industry may import more than the estimates as domestic production might be less than the expected 352 lakh bales and also international cotton prices are lower than the Indian prices. In the last few weeks, there has been steep hike in cotton prices, by about Rs.6,000 a candy which is a matter of concern to the textile industry for which cotton is the main raw material. According to data obtained from sources in the trade, cotton price (Shankar – 6 variety) is now Rs. 39,600 a candy compared to Rs 34,300 in April and Rs. 34,000 in January this year. Prior to that it has been fairly stable in the Rs 32,000 to Rs. 34, 000 range between January and In January last year, the price was Rs. 32,000 a candy. This has hit the acquisition prices for textile mills that do not have stock of the raw material. The mill gate price is more than Rs. 40,000 a candy. This is an abnormal increase, said C. Varatharajan, president of the South India Spinners’ Association. However, sources in the Ministry of Textiles are not worried as there is sufficient availability of cotton. Both imports and exports are at the expected levels. Prices also depend on market sentiments, said a senior official in the Ministry of Textiles. At its meeting in February, the Cotton Advisory Board estimated imports to be 11 lakh bales and exports to be 70 lakh bales this year.
According to sources, prices will come down once the rains start in the cotton cultivating areas. Prices have gone up mainly because of the delay in the arrival of the monsoon and reports that cotton production next season might be lower than in this year. M. Senthil Kumar, chairman of Southern India Mills’ Association said that they have asked the textile mills not to panic. But, the Government should create a stability fund to help mills buy cotton during the peak season. According to Prabhu Damodaran, secretary of Indian Texpreneurs Federation, the Government should clearly indicate the cotton position so that there is no speculation in prices. The mills felt the price pressure in cotton last year only during July-August. This year, it has started early.
SOURCE: Yarns&Fibers
The finance ministry expects the country’s growth rate to climb to 8 per cent in the current financial year on the back of above normal monsoon. Economic affairs secretary Shaktikanta Das expressed hope that the likely passage of Goods and Services Tax (GST) Bill in Parliament would further add to the business sentiment, fuelling growth. “We will certainly exceed 7.6% growth. If the monsoon is good which we expect it will be because of the forecast and once the GST is passed, we can expect our GDP to touch 8% in the current fiscal,” he told PTI in an interview. In 2015-16, the country’s economy grew 7.6% and the Economic Survey in February had projected a growth rate of 7-7.75% for the current fiscal while RBI had forecast 7.6% for the current fiscal. He further said although the GST is likely to be rolled out from April 2017, its passage would significantly help in boosting sentiment and generating economic activity. “The moment GST is passed, the business environment will improve. This will give a huge boost to business sentiment and economy is all about real factors and sentiments. So, the sentiment will turn strongly positive and then industry and business will also start the process of re-orienting their business for GST purpose. You will suddenly see a lot of spurt in activity,” he added. Earlier this month, the India Meteorological Department (IMD) had stated that there is no possibility of a “deficient” monsoon this year and 96% chances are that the rainfall would be “normal to excess”. But later, the IMD said the slow progress of the southwest monsoon has led to overall deficiency of rains by 22% from June 1-15.
SOURCE: The Financial Express
Finance Minister Arun Jaitley feels that the fears of manufacturing States such as Tamil Nadu, Maharashtra and Karnataka regarding revenue implications for their exchequer as a fallout of the Goods & Services Tax (GST) are overstated. “Manufacturing States, which believe that a destination tax will reduce their taxes, are also the ones that will gain the maximum out of service tax. So, when you net total it, I think the fear is a little overstated,” Jaitley said.
Words of reassurance
In an interview with BusinessLine, he said: “Tamil Nadu has had a conventional position that as a manufacturing State, its interests should be protected. And we (the Central government) are committed to that. The very fact that for five years, we will underwrite all the losses is a protection. I think Tamil Nadu’s interests will be substantially taken care of.” Jaitley’s comments should reassure the Tamil Nadu government, which has expressed concern about the impact of the proposed GST on the fiscal autonomy of States. In fact, Tamil Nadu Chief Minister J Jayalalithaa, at a recent meeting with Prime Minister Narendra Modi, had said that GST would lead to a permanent revenue loss for “manufacturing and net exporting States like Tamil Nadu.”
Numbers favour GST
Aware that the support of other parties in the Rajya Sabha — where the BJP lacks a majority — is crucial for the Constitution Amendment Bill on GST to sail through, Jaitley said: “I have no doubt that the numbers are on the side of GST.” As regards the main Opposition party, the Congress, he said, “The party needs to reconsider its position on some of its conditions. It was not its position when it introduced the Bill; these are just add-ons as a Parliamentary tactic.”“I will certainly try my best to mobilise (support). I am meeting leaders of various political parties. Even with the Congress, I will continue the dialogue. Either the Congress supports it or it allows a vote on it,” he stated. Even as Jaitley and his team are looking to win over those still opposed to GST, the latest statement of support from Kerala Finance Minister Thomas Isaac, at variance with the Left’s stance, could come as a booster. Meanwhile, a member of the Empowered Committee of State Finance Ministers said that at the most recent meeting, Tamil Nadu had not been as vehement in its opposition to GST as it had earlier been. In a statement, Tamil Nadu Minister for Commercial Taxes KC Veeramani, who represented the State, did not oppose GST, but raised certain issues that were common to other States as well, the member said. “Two key issues were raised by the States. The first was the wide variation in the revenue-neutral rates (the rate at which there will be no profit or loss to the State) proposed by the Chief Economic Advisor and the National Institute for Public Finance and Policy (NIPFP). The second pertained to the threshold limit for dual control or the business turnover at which GST will be levied by both the Centre and the State,” the member said. While the Chief Economic Advisor has suggested a revenue-neutral rate of 15-15.5 per cent, the NIPFP has proposed a rate of 27 per cent. With the government keen to push GST in the upcoming session of Parliament expected in July, the Empowered Committee is likely to meet two-three times in quick succession. The CEA and the NIPFP are expected to make presentations to the panel.
SOURCE: The Hindu Business Line
The EU-India FTA (free trade agreement) negotiations have been ongoing for more than nine years. The two-way trade in goods stood at $98.5 billion in 2014-15, and India received $24.91 billion in FDI equity inflows from the European Union (EU) between April 2012 and May 2015. The EU has been India’s largest trading partner and the two-way trade is likely to swell significantly if the parties could firm up the long-pending FTA, officially called the Broad-based Bilateral Trade and Investment Agreement (BTIA).
Negotiations for an ambitious and broad-based FTA were launched in June 2007; after 12 formal rounds and several technical meetings and discussions, these were brought to a de facto standstill in the summer of 2013 due to a mismatch of the level of ambitions and expectations. Negotiations focused on market access for goods (to improve coverage of offers on both sides), services, a meaningful chapter on government procurement and sustainable development. Discussions have resumed since January 2016, with the purpose of assessing whether sufficient progress can be made in key outstanding issues before formally resuming negotiations.
At the EU-India Summit of March 30, President Jean-Claude Juncker of the European Commission took a clear stance in favour of tangible progress in the negotiations, provided there is movement on outstanding issues. In recent past, the EU considered the need to build strategic relationship with emerging economies in trade and investment under its vision “A strategy for smart, sustainable and inclusive growth—Europe 2020.” India has a lot to gain from an FTA with the EU, particularly in regard to preferential and duty-free access to the European market. However, it is evident that the negotiations have been tedious and the path to finalising the FTA is fraught with difficulties, given India’s high trade-related regulatory barriers and partial access to a few services sectors like professional services, financial services and government procurement.
There are key contentious issues. India wants the EU to give it greater market access in the services (especially Mode 4) and pharmaceuticals sectors, provide data secure nation status (beneficial to India’s IT sector) and liberalise visa norms for Indian professionals. On the other hand, the EU wants India to overhaul its financial sector, cut taxes on wines and spirits, reduce tariff on the dairy sector and create a stronger intellectual property regime and reduce duties on automobiles. With regard to the financial sector, the EU has requested for various regulations pertaining to bank branches, numerical quotas, foreign ownership, equity ceilings, voting rights and investments by state-owned companies in foreign banks in India removed, among other changes. Whether India can summon the political will to satisfy European demands is difficult to determine.
The negotiations have reached a roadblock on the question of whether the EU will liberalise its visa regime for Indian professionals. India’s demographic advantages have provided it with a skilled, competitive, English-speaking workforce, of which Europe will be lacking in the near future. Considering this, India places considerable importance to Mode 4 liberalisation. Mode 4 refers to the delivery of a service within the territory of a member with the service provider being present as a natural person. In essence, this enables free movement of individual professionals by committing to measures such as relaxation of immigration norms. Europeans, however, have been unable to take on a consolidated position on the matter, which is subject to individual immigration policies of member states rather than of the EU as a whole. It is highly unlikely this issue will be resolved soon unless both sides reach an amicable compromise.
High customs duties on European products such as automobiles and alcohol remain key issues. The Indian automobile industry is apprehensive about its level of competitiveness due to high costs of inputs, the rupee’s depreciation and the cascading effects of various taxes, apart from the economies of scale the EU auto industry enjoys. The IPR provisions in India-EU draft FTA also raise concerns as they will limit the capacities of both India and the EU to use public health safeguards and flexibilities allowed in WTO’s TRIPS Agreement. In addition, negotiations are stuck on the issue of Indian policy on government procurement. India considers government procurement a sensitive issue from a development perspective and is reluctant to make changes in its policy. The importance of signing the India-EU FTA is immense. Against the backdrop of the changing global trade architecture, with world trade shifting towards mega trade pacts such as the TPP and TTIP, away from the MFN route, it is imperative for India to sign the FTA with the EU at the earliest. However, India has been going slow on RTAs and FTAs, as the earlier trade deals that India signed with Japan and Korea have not yielded expected results and, in fact, there has been a decrease in trade with these countries after the signing of agreements. India is seriously analysing its FTA policy, though it is fully aware of the consequences of being isolated on the global trade front if it does not act swiftly in concluding some of the FTAs pending for long.
Unfortunately, despite talks of a potential revival of the stalled EU-India FTA, the chances of it getting signed remain grim. Blockages in India’s tariff and non-tariff barriers policy and EU’s reluctance to open doors to Indian professionals in the IT sector will be hard to overcome. This FTA needs political will from both sides.
A practical solution is to find a midway wherein both the partners can relent on certain issues. For instance, India need not worry about giving access to the European automobile industry, as the Indian automobile sector is hugely competitive and has sufficient demand from within the country. Similarly, the Indian dairy sector should be able to cope with reduction of tariffs on dairy imports from the EU. For the FTA to become a reality by the end of the year, India has to adopt a flexibility approach and iron out differences on crucial issues.
SOURCE: The Financial Express
The government on Sunday said the pending dialogue of foreign secretaries of India and Pakistan have not been cancelled even as it said any policy with Pakistan will be based on a dialogue only between the two neighbours and there is no place for third party. “With Pakistan the government has been firm on its stance based on three parameters. Firstly, we want to solve every issue through a dialogue process. Secondly, that dialogue will have only two parties – India and Pakistan. No other country or any other region can be party to this. And finally, terror and dialogue cannot go together,” External Affairs Minister Sushma Swaraj told reporters during her annual media conference. The decision to hold meetings between both foreign secretaries on a regular basis was decided in 2014 when Prime Minister Narendra Modi held his first bilateral meeting with Pakistan PM Nawaz Sharif. However, till date the dialogue has not happened smoothly due to the involvement of Hurriyat leaders over the Kashmir issues and then the Pathankot Air Force base attacks, which took place on January 2. As a result, the foreign secretary-level talks that were to take place in that month also got derailed.
Last year India and Pakistan initiated a Comprehensive Bilateral Dialogue, a revamped version of the previous Composite Dialogue, which involved all outstanding issues related to the Kashmir dispute, border issues, Siachen and Sir Creek among others. “The foreign secretary level talks have not yet been cancelled. Neither we stopped it nor did Pakistan. But we expect that post the Pathankot incident there should be some action taken from their (Pakistan’s) side. To expect an outcome on this is not something unusual. So we are waiting for a concrete action from them,” Swaraj said. She added that even after the Joint Investigative Team (JIT) from Pakistan visited the attack site and gathered all evidence there has been no action taken. However, she added that Pakistan is analyzing the leads collected and will take some time to review those. Swaraj also expressed hopes that a team from the National Investigative Agency (NIA) will be allowed to visit Pakistan to further their probe. Both foreign secretaries had last met in Islamabad on the sidelines of the ‘Heart of Asia’ conference in December.
SOURCE: The Hindu Business Line
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 45.17 per barrel (bbl) on 17.06.2016. This was lower than the price of US$ 45.22 per bbl on previous publishing day of 16.06.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 3033.72 per bbl on 17.06.2016 as compared to Rs. 3039.39 per bbl on 16.06.2016. Rupee closed stronger at Rs. 67.17 per US$ on 17.06.2016 as against Rs 67.21 per US$ on 16.06.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on June 17, 2016 (Previous trading day i.e. 16.06.2016) |
Pricing Fortnight for 16.06.2016 (28 May, 2016 to June 13, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
45.17 (45.22) |
47.61 |
|
(Rs/bbl |
3033.72 (3039.39) |
3191.77 |
|
|
Exchange Rate |
(Rs/$) |
67.17 (67.21) |
67.04 |
SOURCE: PIB
The country’s textile and garment makers have renewed their demands for 0.30% tax at source for the next fiscal year to attract more investment. If it is not possible, they have urged the government to continue the exiting 0.6% for the next fiscal year 2016-17 for the sake of creating more jobs. Several leaders of the RMG and textile sectors came up with the call at a joint press conference at BGMEA headquarters in the city. Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA), Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) and Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) jointly organised the press conference.
In the proposed budget for the fiscal year 2016-17, the government has proposed to increase tax at source to 1.5% from 0.60%. “It has become a tradition for the government to increase tax at source in every budget, but I think that there should be a certain rate for a certain period,” BGMEA President Siddiqur Rahman told the press conference.“Textile and RMG sector would be the worst victim of the proposed tax at source. In the proposed budget for the next fiscal, tax at source increased to 1.5% from 0.60%, a 150% rise, for all export oriented-sectors, which will hinder the growth of the sectors,” he stated.
On the other hand, Rahman said: “The government has set 7.2% GDP growth for the next fiscal, which is conflicting with government’s labor intensive industrial policy as 25% contribution comes from the manufacturing sector.” As the production cost has been increased by 8% to 10% due to the compliance issues, the risk factor of the RMG sector has already increased by 30% to 35%. Considering all the aspects, most of the RMG factories would not be able to survive, he added. “The government has increased its revenue earning target indiscriminately without considering the consequence on the overall investment,” said FBCCI First Vice President Shafiul Islam Mohiuddin who also stressed on enhancing revenues collection through industrialisation. He said: “The budget proposal should not be a burden for the investors, which will discourage the investment, a tool for creating new jobs.” The proposed budget has increased tax on chemicals from 3% to 5%, which will ultimately discourage the investments, said AH Aslam Sunny, first vice president of BKMEA. In September last year, the government had hiked prices of gas by 100% and it has increased tax at source to 1.5%. Now the question is whether the government really wants industrialisation or not, said Md Fazlul Hoque, vice president of BTMA.“If the government continues to impose tax burden one after another on the industry people, how can the country’s industry would grow further,” he questioned.
SOURCE: The Global Textiles.
Despite falling acreage, the government in Pakistan's Punjab province has fixed a cotton production target at 9.5 million bales for 2016/17. Addressing the media after the second meeting of the Cotton Crop Management Group (CCMG) at the Central Cotton Research Institute in Multan on Thursday, Additional Secretary Agriculture Hussain Sardar said that all resources would be used to achieve the target. He said that the cotton seed reform project had been initiated to curb the cotton crisis and that the Punjab government had approved to set up the Punjab Agriculture Commission. Punjab contributes 75 per cent of Pakistan's cotton production which fell about 30 per cent in 2015-16 due to a host of factors including rain, floods and pest attacks. Hussain Sardar said that the government had allocated Rs 1.8 billion in the budget to provide the most modern machinery to the farmers to increase per acre yield. A chain of service centres would be established across the province to provide agriculture equipment, including tractors, harvesters and bulldozers, he added. The Punjab Agriculture Department had expected sowing on 5.7 million acres with the production target of 9.5 million bales for the 2016-17 but till the first week of this month, it was sown on mere 3.5 million acres and the favourable cultivation time is virtually over. Punjab Director General Agriculture (Extension) Dr Anjum Ali said that at least 822,799 cotton farmers had been imparted modern cultivation training. He said that statistics showed that 84 per cent cotton area had been cultivated, which was 14 per cent less than the last year. But the Pakistan Cotton Ginners Association (PCGA) has said that official figures of 84 per cent cotton sowing are exaggerated and fictitious. At a press conference in Multan, PCGA chairman Shahzad Ali Khan, vice-chairman Sarfraz Nazim Awan and former chairmen Haji Muhammad Akram and Suhail Mehmood Harral said that the federal and provincial governments had failed to convince the farmers to increase cotton acreage. They claimed that cotton was cultivated on 50 per cent less area this season as compared to last year.
SOURCE: Fibre2fashion
Training to be provided to the first batch of 2,000 recruits from the Youth Employment Agency (YEA) in the textile and apparel industry, for which the Ghana government will be investing GhC16 million, said the Minister of Employment, Mr. Haruna Iddrisu. Mr. Iddrisu said that it was the intention of the government to roll out 5,000 persons, mainly unskilled people, and these would include ‘kayayei’ among others. This is being done as a tripartite collaboration among the Ministry of Gender and Social Protection; the Ministry of Employment and Labour Relations and other textile and apparel companies that will employ 3,000 youth. He said that the move formed part of the President’s quest to transform the textile and apparel sector because he identifies the apparel and textile sector as a catalyst to spearhead his industrial revolution. Of the 5,000 to be absorbed, he said that they expect Dignity to take about 2,000 who will be YEA interns to be trained into skilled people. The African Growth and Opportunity Act (AGOA) had been renewed for another 10 years. This creates further opportunities for the people who want to export into the United States market to do so unhindered. Companies in the country are called to take advantage of the extension period to export into the American market.
SOURCE: Yarns&Fibers
In the following year, the Trans-Pacific Partnership (TPP) agreement will contribute to boosting non-traditional exports by up to 25%, and thus allow Peru to access new markets, Foreign Trade and Tourism Minister Magali Silva announced on Sunday. "We have signed this century's most relevant agreement; that is the TPP, signed last February 4th. It sets a significant milestone achieved by the current government," Silva said when interviewed by Economika, a program developed by Andina Online Channel. According to Silva, such potential could be only reached through commercial exchange between Peru and TPP members, with which the nation had not inked a Free Trade Agreement (FTA) yet. Such countries are Australia, New Zealand, Vietnam, Malaysia and Brunei. "Through TPP, non-traditional exports may increase 25% by merely supplying [products] to these five countries. We are talking about nearly US$2.25 billion [in revenue]," she stressed. Trade with the said five new markets will mainly boost three sectors related to food, fishery resources and textile products.
Trade offices
At the same time, Silva highlighted efforts undertaken by Peru's Trade Offices based in overseas (OCEXs), which have significantly contributed to non-traditional exports expansion. OCEXs along with PromPeru rely on a trade intelligence tool that detects new global consumption trends, with the aim of identifying and expanding opportunities.
Innovation
Finally, the minister emphasized the current administration has been focused on boosting innovation among exporting enterprises within the Pacific Alliance, above all.
SOURCE: The Andina
Businesses, especially those in the labor-intensive sectors, have complained about rises in minimum wages and social insurance premiums. The Government’s Decree No 49/2013/ND-CP stipulates the base wage for the simplest job in normal working conditions must be based on the regional minimum wage, said Truong Van Cam, general secretary of the Vietnam Textile and Apparel Association (VITAS) at a dialogue last week with the Ministry of Labor, Invalids and Social Affairs. Jobs in the textile-garment sector are heavy, so salaries are normally at least 5% higher than the regional minimum level, and skilled or trained workers are paid even 7% higher. This means a garment and textile employee’s wage is at least 12% higher than the minimum wage. However, the current minimum wage is equivalent to 70% of the average income of salaried workers, around VND5.08 million (US$226.4) in the first quarter this year. This is putting pressure on employers. The ministry should simply require employers to ensure that wages are not lower than the minimum levels set by the Government, Cam said, and that is enough. Nguyen Xuan Duong, chairman of the Hung Yen Business Association, said the ministry should adjust the minimum living standards in a way that the minimum wage can be kept at an acceptable level.
Deputy Minister of Labor, Invalids and Social Affairs Pham Minh Huan told business executives at the dialogue that pending a law on minimum wages, the ministry would propose adding some provisions on minimum wages to the Labor Code. According to Luan, three factors for calculating minimum wages are needs, social and economic conditions, and average wages on the market but the National Wage Council is now focusing on the “needs” factor. Minimum wages have been revised up considerably in recent years, so negotiations over the 2017 minimum wages should delve into all factors including the correlation between areas and the endurance of enterprises. Besides minimum wages, employers are having difficulty with social insurance payments for their staff. Social insurance accounts for 24% of wages and allowances, compared to ASEAN’s highest rate of 18%, Duong said. Therefore, the percentage should be lowered. Previously social insurance is paid based on the wage stated in the labor contract, which is normally the same as the mandatory minimum wage.
SOURCE: The Vietnam Bridge
The EU-Vietnam Free Trade Agreement (FTA) should deliver strong future economic benefits and enhance the competitiveness of the nation’s private sector, says the Ministry of Industry and Trade (MoIT). The FTA, which was signed late last year, will generate new growth and export opportunities for small, medium and large local companies when it comes into full force in 2018, said Trade Tran Quoc Khanh, deputy minister of the MoIT. Mr Khanh made the remark in response to queries from guests at a conference in Hanoi discussing the full ramifications of the trade deal. The Vietnam government has long been an advocate of bilateral and multilateral free trade, said Mr Khanh, and we are confident this new agreement once signed by Prime Minister and approved by the NA will deliver promising new channels of trade for Vietnam and EU economies. We are particularly pleased to see that the deal provides clear and simple rules of origin, as well as transparent and effective origin procedures to administer the rules without creating unnecessary barriers to trade. In addition, the FTA includes advance rulings on origin and tariff classifications, promotion of automated border procedures and an impartial and transparent system for addressing complaints about customs issues.
The Vietnam government is committed to growing its trade partners with economies around the globe and is particularly focused on diversifying Vietnamese local companies exports to markets such as the EU, US, ASEAN and Eurasia. The government looks forward to the EU deal being finalized by all of the respective parties and to seeing precisely what specific international opportunities will be created as a result. Mr Khanh said he understands the concerns of many citizens regarding free market competition and potential threat to the nation’s local businesses. But he reminded guests at the conference that in the decade following the nation’s accession to the World Trade Organization exports more than tripled— and stood at US$160 billion last year. This vividly demonstrates that citizens and local companies have nothing to fear from open market competition, said Mr Khanh. He said he was confident the new trade agreement means the nation’s exports could see a substantial boost amid broader access to the EU— whose member-countries collectively represent one of the largest economies in the world.
Key exports of Vietnam to the EU include telephones and parts, electronic products, footwear, textiles and clothing, coffee, rice, seafood and furniture, he said, but told the guests that as a result of the FTA the government would concentrate on enlarging the range of exports. The FTA will allow the nation to move away from the traditional export drivers and into other sectors of the economy, particularly the technology segment, a key to unlocking the full economic potential of Vietnamese, said Mr Khanh. In 2012, said Mr Khanh, the Vietnam government unveiled a broad, ‘three pillar’ economic reform program, in which it proposed to restructure public investment, state-owned enterprises and the banking sector. The FTA will help advance the economic reform begun in 2012 and play an instrumental role in setting the stage for economic stability that will reign for decades to come, said Mr Khanh. Most importantly, said Mr Khanh, the agreement will provide a hefty boost to an already bustling and robust economy that will continue to grow a larger middle class, lifting tens of millions of the nation’s citizens out of poverty.
SOURCE: The Vietnam Bridge
