A European Commission (EC)-Vietnam Working Group on Co-operation met in Hanoi on Friday to discuss co-operation activities and initiatives in the framework of the EC's National Indicative Programme (NIP) for Vietnam during the 2002-04 period in which 128 million euros had been committed for bilateral projects.

The meeting was held under the co-chairmanship of Duong Duc Ung, Head of the Ministry of Planning and Investment's External Economics Department, and Markus Conaro, Ambassador and Head of the EC delegation to Vietnam.

The meeting issued a press release, expressing satisfaction with the progress of EC-supported projects in economic cooperation, health, education and rural development. It noted that 2004 is a particularly fruitful year in terms of new commitments with 78 million euros being made for six new initiatives. They include support to poverty reduction and growth (20 million euros), support for the renovation of education management (12 million euros), health care support to the poor of the northern mountainous and central highlands regions (18 million euros), initiative for pro-poor development in the northern mountainous region (17 million euros), institutional support programme (8 million euros) and support to the forestry sector (3 million euros).

In addition, the EC also committed around 5 million euros annually through non-governmental organisations and other programmes.

At the meeting, both sides touched upon a new country strategy paper for 2007 to 2013 which aims to reduce the number of sectors in which the EC worked and continue the move towards budgetary and sector support.

Vietnam has long maintained its economic and trade relations with the European Union (EU) member countries and these relations have rapidly and strongly developed particularly since Vietnam and the EU established diplomatic ties in 1990.

The EU is now becoming an important partner and large market capable of consuming different kinds of products from Vietnam such as footwear, garment and textiles, agricultural produce, handicrafts and fine art articles, wood and plastic products, electronics and seafood.

The bloc is also a highly developed economic sector which can meet Vietnam’s import demands for technological equipment and material to serve the national economic development with the aim of boosting the process of national industrialisation and modernisation.

The first step of Vietnam-EU relations focused on the repatriation assistance programme with the total aid value from the EU amounting to more than US$110 million. And such relations continued to flourish in all economic, political and social areas.

2004 marked breakthrough developments in bilateral and multi-lateral relations between Vietnam and the EU. The biggest event was the fifth Asia-Europe Meeting (ASEM5) which was held successfully in Hanoi in October. The event was an important multilateral activity, adding fresh impetus to bilateral relations between Vietnam and the EU member countries.

In the framework of ASEM5, the first summit meeting between Vietnam and three leading EU countries was held to create favorable conditions for negotiations between Vietnam and the bloc on Vietnam’s admission to the World Trade Organisation (WTO).

On December 3, the EU announced full removal of garment and textile quotas for Vietnam. This was considered the second important bilateral agreement following the first on Vietnam’s conclusion of bilateral negotiations with the Union on its entry to the WTO. The removal demonstrates new developments in economic co-operation between Vietnam and the European trading bloc. It will help elevate Vietnam-EU economic and trade relations to a higher plane with the aim of benefiting both sides and raising the competitive capacity of Vietnamese garment and textiles businesses when entering this quotas-free market.

The International business circle called the removal as "early harvest" because Vietnam is not yet a WTO member but the EU agreed to remove garment and textiles quotas for Vietnam in the same way as it did for full WTO members.

2004 was also a successful year for Vietnam in its efforts to develop economic, trade and investment relations and development co-operation with the EU. Two-way trade turnover hit a record high of 6.4 billion Euro percent, an increase of 24 percent against 2003. Vietnam’s export turnover to the trading bloc netted 5 billion Euro while its import turnover was 1.5 billion Euro. Among the good items accounting for large proportions of the total export volume were garment and textiles, seafood, footwear and handicrafts. Two-way trade turnover is forecast to surpass the 7 billion Euro mark in 2005.

In addition, the ODA funding pledged by the EU for Vietnam in 2005 also rise 40 percent against 2004. By early December 2004, foreign direct investment (FDI) from EU member countries increased by 20 percent over 2003. The EU now has 445 investment projects operating in Vietnam with a total registered capital of 6.8 billion Euro.

Also worthy of note is that in 2004, Vietnam was listed for the first time in 2004 as Ireland’s ODA recipients while France’s ODA funding to Vietnam soared by 40 percent. During the visit to Vietnam by French President Jacques Chirac in 2004, 21 bilateral agreements were signed including two major projects on building tramlines in Hanoi and upgrading locomotive systems worth nearly US$100 million.

In 2004, the EU stepped up co-operation with Vietnam in poverty reduction under a sustainable development strategy in the 2002-2006 period. Under the strategy, the bloc will provide Vietnam with 162 million Euro with a focus on human resource development, education and training, and economic reforms to facilitate the country’s international and regional economic integration.

Recently, the EU decided to provide Vietnam with 20 million Euro in non-refundable aid to help it implement the comprehensive growth and poverty reduction strategy in the framework of a credit programme for poverty reduction, phase 3.

In 2004, relations between the two sides in the areas of politics, culture, fine arts, education, labour co-operation, science and technology were strengthened through diverse activities on the sidelines of ASEM5 such as youth forum, people’s forum and forum on cultural diversity and exchanges.

This year’s two-way trade turnover between Vietnam and the European Union (EU) reached 6.4 billion euro, up 20 percent over last year, according to the EU Department of the Foreign Ministry.

Of the figure, Vietnam achieved nearly 5 billion euro from exports and around 1.5 billion euro from imports. The country’s major export items include garments, seafood, footwear and handicrafts.

The European Union will intensify investments to help Vietnam develop human resources and speed up their process to join the WTO in the period up to 2006, said the Head of the EU Co-operation Office in Vietnam, Andrew Jacob at a seminar in Hanoi on Friday.

Since 2002, the EU has invested 950,000 Euro in scholarships for Vietnamese students to study in Europe, 995,000 Euro in the development of Vietnamese small- and medium-sized enterprises, almost 56.8 million Euro in rural development, 10 million Euro in urban environment plans, and 990,000 Euro in street children support.