| The European Union and Vietnam have signed an agreement that gives Vietnam an increase in textile and clothing quotas worth 200 million euros (about $215 million) a year in exchange for tariff reductions by Vietnam for the textile and clothing sector.
The agreement, signed in the Vietnamese capital city of Hanoi in February, came as the result of four days of negotiations between the European Commission and Vietnam's Ministry of Trade. Commenting on the agreement, EU trade commissioner Pascal Lamy said it is evidence of EU's commitment to strengthen trade and investment links with Vietnam and that "it is also a step in the direction ahead of Vietnam's accession to the WTO (World Trade Organization)," which is under negotiation.
The agreement, which has a duration of three years, provides that the EU will increase its textile and clothing quotas it applies to Vietnam by 50 to 75 percent. The estimated value of these concessions is 200 million euros for 2003 and 225 million euros for 2004 and 2005. Under this agreement, total imports from Vietnam in the sector will increase by about 25 percent, with the possibility of exceeding the 1 billion euro mark for the first time.
In return, Vietnam commits to reduce its customs duties for EU imports of textile and clothing products progressively to 20 percent for clothing, 12 percent for fabrics, 7 percent for yarns and 5 percent for fibers by 2005.
In 2001, Vietnam was the 22nd supplier of textile and clothing products to the EU, accounting for 806 million euros or 1.1 percent of total imports in the sector, according to the EU.
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