1. Analysis of the positive impact and negatively on the competitiveness of
enterprises Vietnam. When Vietnam to participate in the free trade agreements
Vietnam – EU (VEFTA) and proposes appropriate business strategy for the
business.
TABLE OF CONTENTS

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1. Analysis of the positive impact and negatively on the competitiveness of
enterprises Vietnam. When Vietnam to participate in the free trade agreements
Vietnam – EU (VFFTA) and proposes appropriate business strategy for the
business.
1.1 General Presentation of VEFTA
1.1.1 The parties negotiated
Vietnam and the EU: In particular, the EU to negotiate with nature as a
unified block trade, the commitments that the EU offer will bind all the Member
States of the EU-is composed of twenty-seven countries; In contrast the Vietnam's
commitments will be valid for goods and services from all EU member countries.
The EU is Vietnam's major trading partners (particularly in the area of exports).
So getting the free trade agreement with this market will impact directly and in full
scale for several sectors of Vietnam.
1.1.2 The commitment
In principle, the degree of "liberalization" of the contents of commitments is to
separate free trade agreements (FTAs) with open trade agreements normal.
So free trade agreements Vietnam - EU trade deal would be that the parties (EU
and Vietnam) will be presumed to make a strong commitment, wide open than the
orange WTO, for example:
+ Trade in goods: tariff reduction commitment (to 0% or near 0%) for many (or
most) of the commodity groups
+ Trade in Services: Committed to open services markets in more fields and /

was switched on some important leads as touted on the open commodity market. This
step is especially important for building the Foundation for the agreement that the two
sides are negotiating.
Therefore, the fourth negotiating session is very important in the transition
from negotiations to clarify the benefit each other's demands to negotiate essentially to
open each other's market like. Therefore, the focus of the talks Wednesday would be
the most important issues of the two sides, which is particularly concerned that
problems such as goods, services, investment, Government purchases ... as well as
other matters related to the frame agreement to mutually make the process of opening
up markets for each other, such as the protection of intellectual property rights, the
General regulations on the trade of goods and. .. The two sides expect this Wednesday
negotiations, Vietnam and the EU will be "the bricks to form the agreement."
However, the negotiation process is the same as EVFTA the negotiation of other

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agreements of the EU recently is the very high standard agreement, so this is a very
complex process.
The free trade agreement EU-Vietnam once formed will create a more
favorable environment for Vietnam, the taxes to zero for most goods such as
agricultural products, food products, footwear, apparel and. .. This expected
commercial activity will be promoted, as well as bring more safety in the process of
enterprise's investment. At the same time, the free trade agreement EU-Vietnam is also
expected to European business to invest more aggressively into Vietnam in the coming
time.
Vietnam and the EU have signed off the comprehensive partnership agreement
(PCA) on 8/10/2010 tonight-a text which the EU usually signed before the talks and
the signing of the FTA with the partners. So the future of the free trade agreement,
Vietnam-EU is relatively certain. However no formal round of negotiations would be


-

Simplification of rules of origin

-

Non-tax issues is enhanced (transparency Bill, acknowledge each other, in
accordance with international standards, discussed regulatory issues and
technical support).

However, the EU does not really desire for open market like the United States
should in the FTAs of the cube:
-

The issue of open market not heavy (especially with issues regarding
agricultural products and Agriculture)

-

Can accept the roadmap is open longer than

-

Not too interested in the services sector and investment are not open as well as
the settlement of disputes between investors with the Government, to allow for
negotiations on the "protection" with partners in a number of sensitive services
sectors (e.g. health, education, communications etc.)

-

EU that trade-offs are not so much about the opening market (not too stressed by the
EU in this issue), but Vietnam may have to accept commitments beyond issues of
trade (such as environmental, labor, social values EU,etc,...)
- Businesses can refer to the scope of the FTA that the EU has signed to make
preliminary plans or proposals for each group of issues related to their industry in line
with the interests of the EU industry and ease the acceptance receive.
1.1.5 The effect of VFFTA to the fields of Vietnam
Food production, Vietnam is the largest impact will be subject to the reduced
11-26% of output and 13-30% of workers (both skilled and simple labor). The income
from this sector will decline because of both output and prices are falling. So farmers
in Vietnam will have difficulty when consumers benefit because the price reduction.
On trade, Vietnam will experience more difficult, Vietnam will boost exports 26-44%
thanks to the low initial levels. However, due to the market share of the food trade in
the total trade between the EU and Vietnam small so not much substantive impact.
As for the food-processing industry, Vietnam will reduce manufacturing (Vietnam
rising 14.99-33.05%) and price.
Textiles, apparel & footwear: Vietnam will increase 154.1% footwear and rose
133.1 percent of labor and 14.6% of the production of apparel. However, in the textile
industry, Vietnam's production will fall by 17% and 23.3% reduced labor. Overall,
Vietnam is considered to be most beneficial and will be the transformation of labour
between 3 field.
Production of autos and parts: Vietnam will decrease production. Due to the
initial trade (prior to the FTA) of this sector are very low, Vietnam will reduce
production at most (28-47%) and reduced revenue by about 35%.
Financial services & insurance:

Vietnam has advantages in the field of

financial services, but will have difficulty in insurance services. However, if both this
field 2, the output is steadily increasing for all ASEAN countries. FTA will not impact

Hai Phong city.
Since March 20, 2013, Office construction company Van Lan switch back to
the new address at: room 311-312 new petroleum hotel building, at 441Da
Nang street, Dong Hai I Ward , Hai An district, Hai Phong city.
Phone number: 0312.219.255; Corporate fax number: 0313.979.538
Charter capital: 1,650,000,000 VND
Face value of shares: 1.000.000 VND
• The value paid shares:

+ The number of shares

: 1.650 stake

+ The value of shares

:1.650.000.000VND.

1.2.2 Scope of Business of the Company
 Transportation and freight services, passenger waterway - the road.
 Sales of petroleum products, construction materials, fuel, internal combustion

engines,

machinery,

equipment,

automobiles,

construction


1.3 Analysis of the impact of positive and negative of VEFTA to enterprises in Vietnam
in general, Van Lan Joint Stock Company in particular.
1.3.1 Reason for choosing Van Lan Joint Stock Company to research topics
Van Lan Joint Stock Company is import-export business, specializing in the
field of automobiles and auto parts, and food processing. FTA is negotiated, so the
unknown will exclude what. However the rate in terms of macro, until the year 2015,
2020 and 2025. Through the subdivision for agriculture, industry, services, tariff
policy of the EU for goods exported from Vietnam have specific changes. The
branches are likely to benefit the most include textile and garment, footwear, food
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processing. However, the degree of expansion of production capacity to meet rising
demand by the EU of a number of items that will decide the overall increase on
exports have significantly or not; service areas according to the expectations also
expanded significantly and can increase performance for the entire economy. If there
is no such intensive review will not see the tremendous impact because the EU is the
largest export market of Vietnam.
Even so, VEFTA would still be considerable pressure to the country's exporters.
The EU market is quite rigorous in asking about the quality of the product, the origin
of goods, sanitary epidemiological, labor standards and. .. But if you look on the
positive side, this is an opportunity to convert the production platform, encouraging
clean technology investments, improve competitiveness and corporate responsibility.
So, besides its positive effects, the VEFTA still poses for businesses not small
challenges, including the Van Lan Joint Stock Company. The business of the company
is one of the main subjects under the influence of VEFTA, with a direct impact to the
business.
1.3.2 Analysis of the positive impact and negatively on the competitiveness of
enterprises Vietnam when Vietnam to join the free trade agreements Vietnam - EU

to analyse and raise awareness for the parties concerned to negotiate FTA there is still
very poor in Vietnam. .
The 5th, When EVFTA is signed, the EU will tariff exemptions for most export
products of Vietnam, providing an important comparative advantage for Vietnam's
goods with the other competitors for circulation on the EU market, reducing the risk
of not enjoying tariff preference regulations universal (GSP). Vietnam cut tariffs
according to the EVFTA between the two sides also benefit when the EU exports of
technological products, raw materials, trade, service,etc,... There is high quality in
Vietnam, contributing in the long term to help increase their competitiveness for
businesses to Vietnam. On the other hand, Vietnam will also improve the legal
framework in many non-commercial sector better. Along with that, after signing the
agreement, Vietnam will have more about 95,700 people will get rid of poverty by
2020. In addition, according to experts, through the negotiation and signing of the
EVFTA with Vietnam, the EU was expected to boost exports, promote investment in
Vietnam toward the goal of ASEAN and other Asian countries such as Japan, China,
India, and at the same time, creating more opportunities for market access for
investors and provides the service of the EU.
The 6th, The signing of FTA Vietnam - EU would be an important boost for
Vietnam to further promote economic relations and trade with the EU. With the size of
500 million consumers and GDP over 17,000 billion USD, the EU is a large market
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for enterprises of all countries, including Vietnam. Currently, Vietnam's exports to the
EU reached only 0.8% of total EU imports. In fact, only 42% of export turnover of
Vietnam to the EU enjoy 0% tax rate (including articles of Preferential general tariff
GSP). While this rate of some ASEAN countries amounted to 80-85%. Thus, both
sides have strong potential to develop economic relations and trade after the FTA.
The 7th, setting up a FTA with the EU will certainly contribute to the process of
creating the business environment, investment openness, more ventilation, since that

This fact is true for both Vietnam, such items and imported dairy products in recent
years (particularly for dairy goods, prices were constantly left due to other causes such
as raw material prices added up, large advertising costs are cornered on pricetoward
the mentality, a foreign buyer for the excessive advertising on the mass media about
the quality of some foreign milk products; loophole of market management
mechanisms, including chassis and price is too wide and the inability of measures
linked exclusively about price,etc,...).
According to the General Statistics Office, the total level of shipping
commodities, Vietnam imports showed that from 2005 to the present, as from 2007,
the effect of the tax cuts under the roadmap commitments in the international trade
agreement that Vietnam's export turnover to participate, have markedly improved in
both speed and scale over each yearexcept in 2009, due to the impact of the economic
crisis-global finance. In addition, Vietnam bilateral trade agreement (BTA)-the United
States has contributed to the economic relations of the two countries achieve these
impressive results, including two-way trade turnover of 450 million USD in 1995 has
increased to more than 15 billion dollars in 2009. Free trade agreement between India
and ASEAN will help to more than 4,000 items of ASEAN member countries are
easily entered the market of 1.1 billion people of India, contributing to boosting
bilateral trade value rose from 40 million USD at present to over 100 billion within
the next five years. Have to say, your participation in the FTA between ASEAN with
China and India, Vietnam will have a chance to advance potential giant market
accounted for more than 50% of the population and GDP in the world, with the
technological resources and financial resources necessary,etc,...
Current trade relations, the EU is currently the third largest trading partner of
Vietnam and is the second largest export market of Vietnam (after the u.s.). In 2008,
the total turnover between Vietnam and the EU reached 14.9 billion dollars, up about
2.5 times compared in 2003. In particular, exports to the EU reached 10.85 billion u.s.
dollars, up 19.36 percent, and imports from the EU reached 5.4 billion dollars, an
increase of 6% compared in 2007. The Group of Vietnam's exports to the EU have
high growth rates are the traditional products like textiles, garments, furniture, green

competitiveness in the domestic market? Can anticipate the competitive pressure in
the electronics, automotive, motorbikes and machinery, equipment, etc. This sector
may be in decline due to the impact of the Vietnam-EU FTA.

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The FTA between EU-Vietnam will broaden for Vietnam's goods exports to the
EU; reduce or eliminate tariff barriers (proposed Vietnam's goods to 90% in the EU
are entitled to a tariff of 0%). Vietnam currently are adjusting strategies to attract FDI
(foreign investment), quality-focused investors with the possibility to transfer new
technology,etc,... The EU's partners are fully capable of satisfying the requirements of
that
b) Negative impact:
First, when signed FTA accords with the EU, Vietnam businesses will bear
great competitive pressure at home. The EU goods when going into Vietnam will
more easily and will be cheaper (by not subject to import tax) at the same time
enterprises from the EU can be easily established enterprises with 100% foreignowned operations in Vietnam and participated in the field at present Vietnam does not
yet have the strength or are in the early stages of development, such as the logistic
industry, sea port, some loss of consumer goods. With management experience,
superior to superior quality of EU businesses, Vietnam business risk will be Bulgarian
part is pretty obvious.
Second, the FTA could set out for Vietnam the requirements more closely on
the issue of dumping, subsidies and the use of trade defence instruments. With some
of the industry's export strengths, the EU will require cutting the fence tax-free, firstly
remove the form of subsidies from the Government of Vietnam. Some of the major
exports of Vietnam as shoe leather and aquatic products will be more impact if
Vietnam is not resolute defending.
Third, when the signing of the FTA with the EU, Vietnam is still facing
problems concerning the quality of goods. Want to export to the EU, Vietnam

trade deficit of Vietnam from China in the same period of comparison, the export
growth rate of Vietnam into the Chinese market only on less than 3%, while the
import growth rate is above 32%, leaving the deficit from China accounts for more
than 90 percent of Vietnam's annual deficit from 2005 to the present.
In total, in the future, the FTA will have significant impact on the business
activities of enterprises Vietnam as tax cut deeper and closer to nature liberalization
bold business market more, the technical barriers become more diverse, more complex
and higher for the export business and Vietnam. FTAs as high quality, with coverage
areas from basic areas such as trade in goods, trade in services to new issues such as
government procurement, competition policy, the effects on the environment, labor ...
the participation of high-quality FTAs will create conditions to promote reform
mechanisms, policies and business environment of the country, leading to increased

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competitiveness of the economy, while also creating greater competitive pressures and
shrinking market share at home,etc,
One of the major challenges for Vietnam enterprises are encountering the
"internal forces" weak and vulnerable "lesions" from the volatility of global issues and
domestic, especially in last five years . Besides, Vietnam is now in trouble because of
competition from other FTAs in the region.
1.3.3 Proposes appropriate business strategy for the business.
When concluding FTA Vietnam-EU, both Vietnam and the EU will achieve the
benefits individually. However will also met the effects in common, the disadvantages
for competition, market share when reduced taxes. But overall, according to the
experts, there is no charge for first place in export, Vietnam's imports on the EU
market. Vietnam businesses need a preparation, the proper route before concluding
FTA Vietnam-EU.
In that context, clearly require enhanced solutions and the effective

the framework of the FTA in particular.
First of all, enterprises should take the investigation, meticulous survey for
market partners to explore the tastes of consumers. Through it, the business will
determine for themselves the appropriate step in the process of negotiating and
planning data. An effective information system, complete, accurate and timely is
essential for businesses today. At the same time, the Government should also support
enterprises to Vietnam in building tools that have a higher value, such as distribution
channels in the EU, creating a national brand,...
The negotiation and signing of the FTA will be a significant milestone in the
expansion of trade-economic relations between Vietnam and the EU. As a result,
Vietnam businesses need to prepare thoroughly and comprehensively to get ready to
enter the contest. In fact, many businesses have yet to fully take advantage of the tariff
benefits from FTAS do not know, does not meet the conditions of a rule of origin, or
by the sequence of procedure c/o complex incentive of ... The leverage ratio C/O
incentives on export turnover is also very low. For example, with the incentive of the
Korean, Vietnam business exploits are over 70%; also with other countries is only
about 20%, even with the incentives are completely vacant.
Furthermore, the opening of the domestic market under FTA has a broader
scope, so the REAL Vietnam will face increased risk of lawsuits the trade defense.
The technical barriers in trade and quarantine requirements from these markets will
increase rather than decrease when the tax barriers no longer. Other than the previous
period, when business was less engaged and aware to the negotiations and trade
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agreements, in this period, enterprises need access to information to negotiate, be
directed to determine, assess the impact for businesses, are substantive and regular
consultations. In addition, when the FTA was signed, to provide accurate information
to businesses, full, can understand about the FTA, guide and practical ways to take
advantage of the opportunities from the FTA and especially advise on FTA for the

opportunities from the FTA and especially to hire experts to advise on the FTA to the
company if required.

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LIST OF REFERENCES
[1]. Lecture courses International Business Management, Assoc. Dr. Ngo Thi
Tuyet Mai, 2014.
[2]. International Business Administration, Nguyen Thi Lien, 2013.
[3]. The financial statements of Van Lan Joint Stock Company, 2013.
[4]. Annual Report of Van Lan Joint Stock Company, 2013.
[5]. VEFTA impact of enterprises, Le Bao An, 2013.
[6]. VEFTA processes involved, Truong Thi May, 2013.
[7]. Enterprises in the integration process, Le Thi Phuong, 2013.
[8]. Business management tools, Nguyen Thanh Phuong, 2013.
[9]. The relevant documents

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