EVFTA Opens New Chapter in EU-Vietnam Trade Relations
The European Union Vietnam Free Trade Agreement (EVFTA) was signed on June 30 in Hanoi paving the way for its conclusion and increased trade with the EU and Vietnam.
The EVFTA is an ambitious pact providing almost 99 percent of the elimination of customs duties between the EU and Vietnam.
65 percent of duties on EU exports to Vietnam will be eliminated while the remaining will be gradually phased out over a period of 10 years. 71 percent of duties will be eliminated on Vietnam exports to the EU, with the remaining being eliminated over a period of seven years.
The EVFTA is considered a new generation bilateral agreement – it contains important provisions for intellectual property (IP) rights, investment liberalization and sustainable development. This includes a commitment to implement International Labor Organization (ILO) standards and the UN Convention on Climate Change.
Talks between the EU and Vietnam began in June 2012 and ended December 2015, However, the ratification process was delayed due to specific details on tariffs as well as the EU-Singapore FTA which came into effect recently.
Vietnam and the EU are long-standing trading partners. At the end of 2018, EU investors had invested more than US$23.9 billion in 2,133 projects in Vietnam. In 2018, European investors added almost US$1.1 billion in Vietnam.
EU investors are active in 18 economic sectors and in 52 out of the 63 provinces in Vietnam. Investment has been the most prominent in manufacturing, electricity and real estate.
The bulk of the EU investment has been concentrated in areas with good infrastructures, such as Hanoi, Quang Ninh, Ho Chi Minh City, Ba Ria-Vung Tau and Dong Nai. 24 EU member states are invested in Vietnam, with the Netherlands taking the top spot followed by France and the UK.
This is an excerpt from an article appearing in Vietnam Briefing, a subsidiary of Dezan Shira & Associates. For the latest economic, regulatory and business news from Vietnam, visit vietnam-briefing.com.