EU-Vietnam FTA Finally To Come Into Force In Early 2019? Comments on Government Procurement

Image on "EU-Vietnam FTA" created by authorVietnam Investment Review reported that the European Union-Vietnam Free Trade Agreement (EVFTA) will likely be ratified in October or November 2018 and come into effect in early 2019:

“EU firms to bid on public contracts”

Besides quotations from our Co-General Director in Vietnam, my  comments on government procurement under the FTA were featured in the above article as follows:

“The government procurement provisions in the EU-Vietnam FTA are a big step for Vietnam. Vietnamese suppliers will have access to the EU’s US$500 billion public procurement market. For Vietnam and its people, the EVFTA’s government procurement provisions should, over time, improve access to high-quality goods and services from EU suppliers.

Improvements are especially expected in the healthcare and life sciences sectors, as Vietnam’s public procurement in these sectors takes up 67% of the total market value. Vietnam has committed to give EU suppliers the right to bid for up to 50% of the pharmaceutical purchases by the Ministry of Health and many of the hospitals under its control, as well as major research facilities. Even so, this is a very gradual process over a period of 15 years after the FTA comes into effect.

The right to participate in Vietnam’s public tenders will initially be limited to relatively high-value contracts – those worth at least SDR 1.5 million (currently, $2.1 million) or SDR 3 million ($4.2 million) depending on the procurement agency. For construction work, the initial thresholds are even higher at SDR 40 million ($56 million). This is probably meant to protect Vietnamese small and medium-sized businesses.

The EVFTA also contains specific transparency and other requirements to support the procurement process itself, including an independent administrative or judicial authority where suppliers can challenge awards.”

Besides public procurement in healthcare, the EVFTA also provides access to other important government contracts. EU suppliers will be able to bid for contracts from Electricity of Vietnam, the State-run power company, and those of other major infrastructure projects, including roads, railways, and airports.

For more information, please contact Manfred Otto at MOtto@duanemorris.com or any other lawyer at Duane Morris.

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