Lawmakers pass resolutions ratifying the EVIPA at an approval rate of 94.62 percent, June 8, 2020. (Photo: VNA)

The EVFTA and EVIPA are huge opportunities for trade and investment growth and social welfare. When the two agreements take effect, Vietnam will see an increase in both short- and long-term eocnomic growth.

Compensation for economic recession during pandemic 

The Covi-19 pandemic has hurt the production and export of Vietnam and its partners worldwide. The EVFTA will make up economic losses  and multiply market opportunities for businesses as the pandemic subsides.

Market share of Vietnamese businesses in the EU remains modest because they have to compete with many large companies. Just over 42% of Vietnam's exports to the EU enjoy zero percent tariffs under the Generalized System of Preferences (GSP). 

Tran Thanh Hai, Deputy Director of the Import and Export Department of the Ministry of Industry and Trade, said that with the EVFAT’s commitment to open markets and remove import tariffs on nearly 100% of commodities, Vietnam has huge opportunities to boost its exports.

With Covid-19 under control, Vietnamese businesses have an advantage over businesses in other countries.

“The EU is a big market and is creating huge values for Vietnam’s exports, including garments, textiles, leather, footware, agro-forestry and fishery products, and wood furniture. Vietnam has increased export revenue in the EU market. When the EVFTA takes effect, Vietnam will be able to export to the EU market with zero percent tariff,” said Mr. Hai.

Vietnamese businesess will also benefit from importing the EU’s goods and raw materials at good prices.

Tran Hoang Ngan, a National Assembly deputy for Ho Chi Minh City, said, “Of its two-way trade turnover of 57.2 billion USD, Vietnam imports 15 billion USD, most of which are machinery, pharmaceuticals, and cosmetics."

"When the Agreement comes into effect, Vietnamese consumers can purchase EU goods at zero percent tariff. This will be very beneficial. The ratification of the Agrement is good news for businesses and the Vietnamese people,” said Ngan.

Regulations fine-tuned to improve investment environment

The EU-Vietnam Investment Protection Agreement specifies principles for the Vietnam-EU relationship in the spirit of respecting each other’s independence, sovereignty, and territorial integrity in line with the Viet Nam-EU Comprehensive Partnership and Cooperation Agreement.

The EVFTA and EVIPA will motivate Vietnam to continue fine-tuning its institutions and policies to improve the business environment toward fairness, safety, transparency, and friendliness for investors in all economic sectors.

Chairman of the National Assembly’s Committee for External Relations Nguyen Van Giau said, “The ratification of the EVFTA will create opportunities for Vietnam to attract foreign investment, boost socio-economic development, and access the advanced technology of the EU countries."

"With the Free Trade Agreement and the Investment Protection Agreement, Vietnam can attract foreign investment from EU members and its businesses can enter the EU market. The agreements set a legal framework for the Vietnamese State and investors to resolve disputes when their interests are infringed,” said Mr. Giau.

The EU, with a population of more than 500 million people and a GDP of 18 trillion USD is a potentially lucrative market for Vietnam. The National Assembly’s ratification of the EVFTA and EVIPA clears the path for Vietnam to access that market and its economic growth opportunities.