Evaluated as one of the two agreements with the most extensive scope and commitment of Vietnam, EVFTA, the new generation Free Trade Agreement between Vietnam and 28 members of the European Union is believed to open a new era in trade relations between the parties involved.
Currently, EVFTA has concluded negotiations, completed the legal review and has been split into 2 separate texts: The Free Trade Agreement and the Investment Protection Agreement. Both are agreed by The European Commission to be submitted to the European Council for approval before signing.
Once in effect, in a predefined schedule, the FTA may assist in eliminating up to 99% of custom duties on imported goods, in which many goods will benefit from 0% import tax directly after the Agreement becomes effective. This will definitely bring an important opportunity for traders and businessmen of both Vietnam and EU member states in order to attract investment, increase their competitiveness and to create stable, long-term cooperation.
Noticeably, since the import and export structure between Vietnam and the EU is considered to be complementary and not directly competitive in nature, the advantages of this agreement are enormous if the enterprises know how to organize production in order to ensure mutual benefits.
According to calculations, the growth of Vietnam’s exports to the EU will increase from 30-40% in the next 10 years, especially for preferential goods such as agricultural products, seafood, wooden products and textiles.
Moreover, Vietnam also has the potential to become a necessary link for trade and investment activities of European countries in the ASEAN region.
According to Mr. Tran Tuan Anh, Minister of Industry and Trade of Vietnam, EU members are likely to boost investment in Vietnam in their strength fields such as automobiles, manufacturing, and information technology. High-quality capital flows are expected to enter Vietnam together with exported products with European standards and clear origins, thereby indirectly improving the quality of products in the domestic market.
Along with the visits of Vietnamese Prime Minister Nguyen Xuan Phuc to the bilateral partners and leaders of the European Union, Vietnam and the EU have since promised to accelerate the signing, ratification and entry into force of the Free Trade Agreement and Investment Protection Agreement.