The National Assembly of Vietnam ratified the Europe-Vietnam Free Trade Agreement (EVFTA) and the Europe-Vietnam Investment Protection Agreement (EVIPA) in June 2020. The EVFTA which takes effect in July 2020 will reduce or eliminate 99% of tariffs on goods traded between Vietnam and the European Union.
The EVFTA will give Vietnamese companies better access to European markets and also make the country an attractive destination for European investors. The agreement will open up Vietnam’s services, including post, banking and shipping and public procurement markets, align some standards and provide protection for EU food and drinks, such as French champagne or Greek feta cheese against imitations in Vietnam. Vietnam will have a transition period of up to 10 years for adjusting the tariffs on some imports, such as cars.
The trade agreement is expected to boost Vietnam’s total gross domestic product (GDP) by 2.4% and exports by 12% by 2030. It is the European Union’s second such agreement with a member of the Association of Southeast Asian nations (ASEAN) after Singapore, and one of few with a developing country.
Previously, in May 2020, the Import and Export Department under the Ministry of Industry and Trade set up different working groups to implement the EVFTA:
- The first group will work on building and issuing legal documents, such as a circular on rules of origin of goods in the EVFTA.
- The second group will conduct research on tastes and demand of EU consumers and the supply and production capacity in Vietnam.
- The third group will monitor the import and export of Vietnamese goods to the EU market and provide timely advisory measures to help maximize the benefits of EVFTA’s incentives.
- The fourth group will be in charge of communicating and disseminating information about the EVFTA to local associations and business communities.
- The fifth group will work on strengthening of state management of the certification of origin and combating related frauds.
(Sources: Vietnam News; Reuters)