(VOVWORLD) - The EU-Vietnam Free Trade Agreement (EVFTA) is the first FTA that the EU has signed with a developing country in Asia. The newly-signed deal will bolster bilateral trade and investment of European businesses in Vietnam.
 EVFTA boosts European investment and trade with Vietnam (Photo: vneconomy) |
Besides Vietnam, the EU has signed FTAs with three other Asian countries: South Korea, Singapore, and Japan.
Changing EU’s investment picture in Vietnam
Vietnam has emerged more attractive to European businesses as a result of the nation’s stronger growth, reform, and international integration. The number of members of the European Chamber of Commerce (EuroCham) in Vietnam has topped 1,000. Before the EVFTA was signed, European businesses had opened branches or sought partners in Vietnam to capitalize on the deal. A recent EuroCham survey showed that 80% of member businesses think the EVFTA will have either a big or moderate impact on their mid-term or long-term plans. Minister of Industry and Trade Tran Tuan Anh said: “If the EVFTA is ratified, the investment and business environment in Vietnam will become more favorable for European companies. Investment dispute settlement mechanisms will be built and investment protection enforced on the basis of international law in line with Vietnamese and European laws. European investors will enjoy favorable conditions for continuing their investment in developing industries, which will tap Vietnam’s relative advantages and future potential.”
The EVFTA will open the rapidly developing Vietnamese market and make Vietnam an investment center for European investors in Southeast Asia.
Bolstering Vietnam-EU trade
Right after the agreement takes effect, Vietnam will remove 65% of import tariffs on EU goods and gradually remove the remaining tariff lines within 10 years. Vietnam has committed to reducing or abolishing non-tariff barriers in the automobile sector, protecting the automatic geographical indication for 169 food and beverage products of the EU, and opening its public procurement market. In exchange, the EU will remove 71% of import tariffs on Vietnamese goods, lift the remaining tariffs within 7 years, and set a tariff cap on special commodities. The EU also has committed to protecting the automatic geographical indication for 39 Vietnamese products. Minister Anh said: “The deal allows stronger market access. This is a comprehensive agreement, which covers all areas of trade, services, goods, and investment, including conditions of preferential treatment, intellectual property rights, and small and medium-sized enterprises. This means that if we are able to seize all opportunities, we will not only boost our trade revenue with the EU, but also enhance our economy’s competitiveness.”
The EVFTA includes commitments on customs, trade facilitation, quarantines, sanitary and phytosanitary standards, and goods labeling.
The EU is currently Vietnam’s third largest trade partner with two-way trade totaling 53 billion USD in 2018. Vietnam is the EU’s 19th largest trade partner in the world and 2nd in Southeast Asia after Singapore.