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EVFTA new epoch in Vietnam - EU cooperation

On June 30th, Vietnam and the European Union (EU) officially signed EVFTA in Hanoi capital. According to the Ministry of Industry Trade, EVFTA has the highest level of commitments in all FTAs that had been signed. The agreement is comprehensive and equal in term of interests for both the EU and Vietnam.

EVFTA signed after 9 years of negotiation

In October 2010, Vietnam’s PM and EU’s President agreed to start EVFTA negotiations. After rounds of negotiation, On June 25th, 2019, the European Council approved the content. On June 30th, the Agreement was officially signed in Hanoi

The Ministry of Industry Trade, EVFTA started and was signed in the situation that the bilateral relationship between Vietnam and EU has been getting better, especially in the field of economy-trade. EVFTA is a high quality comprehensive agreement that ensures equal interests for both Vietnam and EU with difference in development level between the two sides noted.

When it is implemented, EVFTA will be a “push” for Vietnam’s export, helping to diversify the market and export products, especially agricultural, aqua products and those Vietnam has competition advantages.

EVFTA includes chapters dealing with competitions, State’s enterprises, sustainable developments, cooperation and building ability, legal framework and mechanism. These contents are in accordance to Vietnam law, creating a legal frame work for mutual cooperation and for developments of trade and investment.

In term of strategy, the negotiations and implementation of the agreements sent an active message about Vietnam’s determination in integration to the world’s economy in the situation that there have been unexpected changes in economy and in politics.

A push for the economy

When the Agreement come into effect, EU will remove import tariff to 85.6% of the total tax, equally to 70.3% Vietnam’s export turnover to EU. And 7 years later, EU will remove import tariff to 99.2% of the total tax, equally to 99.7% Vietnam’s export turnover. With the rest of 0.3% export turnover, EU commits to give Vietnam a tariff quota with import tariff of 0% in the quota. This is of importance for EU continuously become one of the two largest export market of Vietnam.

With the commitments of removing import tariff of 100% and with the trade values that both sides agreed, opportunities of increasing exports to products Vietnam has advantages as textile and garment, footware, agricutural and aqua products (including rice, sugar, honey and vegetables) and funiture is remarkable. Currently, only over 42% of Vietnam’s export turnover to EU enjoys the tariff of 0% in accordance to Generalised Scheme of Preferences (GSP)

On 30th June, 2019, together with EVFTA, Vietnam and EU also sign Investment Protection Agreement (IPA). Commitments of fair treatments, comprehensive protection for investment and investors in IPA will contribute greatly to the building of a transparent legal and investment environment. It is expected Vietnam will attract more investors from EU and other countries With EVFTA and IPA, EU investors will have opportunities to approach markets of the countries’ that signed FTAs with Vietnam with more incentive treatments. The Agreement will help to improve relationship between EU and each ASEAN country and with the ASEAN in general- a premise for negotiations of an FTA between EU and ASEAN in the future.

According to research from the Ministry of Plannint and Investment. EVFTA will help Vietnam’s export turnover to EU increase about 20% in 2020; 42.7% in 2025 and 44.37% in 2030. At the same time, EU’s import turnover will increase with a slower speed compared to import, around 15.28% in 2020; 33.06% in 2025 and 36.7% in 2030. In the term of micro economy, EVFTA contributes to increase of Vietnam’s GDP 2.18%-3.25% (2019- 2023) in average; 4.57%-5.30% (2024-2028) in average and 7.07%-7.72% (2029-2033) in average.

Vietnam and EU also agreed on contents dealing with customs procedures, SPS, TBT and trade protection,...creating a legal frame work for cooperation from the two sides, offering advantages for enterprises’ import-export.

EVFTA covers most of large fields

EVFTA is a comprehensive agreement for it covers most of large field. The agreement is not only a condition to help improve 2-way import- export turnover but also help Vietnam to improve its competition abilities, taking part in the new global value chain.

The commitments between Vietnam and EU on trade, service and investment creates an open investment environment facilitating activities from enterprises of both sides. Fields that Vietnam commited to facilitate EU investors include some professional services, financial services, telecommunication services, transport services, and delivery services. Both sides also have commitments on the field of investment and at the same time have discussions about solving disputes between investors and the governments.

Vietnam and EU agreed contents equally to the Government’s Purchase Agreement of WTO’s. With responsibilities as biding online, creatin e-information gate for bidding information, Vietnam should give a road map to implement. EU also commited to give Vietnam technical support for these responsibilities. And Vietnam reserves the right of giving particular proportion of values for local bidders, goods, services and labor.

The commitments on intellectual possessions including commitments on copyright, invention, commitments realting to pharmaceutical and geographical guidance... On the basis, the commitments on intellectual possessions of Vietnam’s is in accordance to current legal regulations. In term of geographical guidance, when the agreement comes into effect, Vietnam will protect over EU’s 160 geographical guidance (including 28 members) and EU will protect Vietnam’s 39 ones. Vietnam’s geographical guidance are relating to agricultural products, foods, giving condition for some Vietnam’s agricultural products to affirm their trademarks in EU’s markets.

Besides, the commitments on services- investments, governmental purchases and specific regulations on market open-door and technical measures in particular fields will give opportunities for enterprises, products and services from EU to approach the market of over 100 million people of Vietnam and will help Vietnam’s consumers to approaches sources of high quality products and services from EU in fields of pharmaceutical, health care, infrastructure construction and public transport...

Besides, the commitments on the State’s management will ensure a stable transparent legal and business environment for investors from both sides in general and for enteprises and investors from EU in particular.

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