The EU-Vietnam Free Trade Agreement (EVFTA) is “the most ambitious free trade deal ever concluded with a developing country” to date.
In a landmark development, the European Union has signed a free trade deal with Vietnam, its first with a developing country in Asia. The FTA paves the way for a significant reduction in tariffs on 99% goods between the trading bloc and the Vietnam.
The FTA is still awaiting the approval of the European Parliament, where some member countries are likely to raise the issue of Vietnam’s human rights record.
The European Union has described the EU-Vietnam Free Trade Agreement (EVFTA) as “the most ambitious free trade deal ever concluded with a developing country”.
Both sides announced the deal in a statement.
The EVFTA was signed Hanoi between European Union Trade Commissioner Cecilia Malmstrom and Vietnam’s Minister of Industry and Trade Tran Tuan Anh and comes after three-and-a-half years of negotiations which ended in December 2015.
The EVFTA will eliminate 99% of tariffs, although some will be cut over a 10-year period and other goods, notably agricultural products, will be limited by quotas.
This agreement is likely to open up Vietnam’s public procurement and services markets, including its postal, banking and maritime sectors.
The EU is Vietnam’s second-largest export market after the United States with its main exports being garment and footwear products.
In 2018, Vietnam exported $42.5 billion worth of goods and services to the EU, while the value of imports from the region reached $13.8 billion, as per official data.
According to the Vietnamese government, the EVFTA will boost EU exports to Vietnam by 15.28% and those from Vietnam to the EU by 20.0% by 2020.
The agreement will impact Vietnam’s gross domestic product (GDP) by 2.18%-3.25% annually by 2023 and by 4.57%-5.30% annually between 2024-2028, said the Vietnamese government.