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Nov 29, 2017 / 12:14

EVFTA: Opportunity high skilled Vietnamese labor force

With high level of commitment, the EU – Vietnam Free Trade Agreement (EVFTA) is a comprehensive and high quality agreement, which balances the benefit of both Vietnam and EU and taking into consideration the gap in level of development.

EVFTA is deemed to have numerous benefits, including many for high skilled Vietnamese labor force. Firstly, the EVFTA will ensure working conditions for employees. Commitments on labor forces in EVFTA as well as other next generation FTAs have been a new trend, when partners set higher requirements in addition to the objective of economic development such as labor, environment, climate change, natural resources. 

Commitment on labor force is stipulated in Article 3 on Commerce and Sustainable development of EVFTA, which introduces criteria and multilateral agreements on labor forces which are related to commerce. As such, Vietnam and EU are committed to facilitate trade development in parallel with creating sustainable and diversified jobs for everyone, at the same time to approve and implementing obligations stipulated in International Labor Organizations (ILO) Declaration on Fundamental Principles and Rights at Work in 1998. Specifically, including: a) freedom of association and the effective recognition of the right to collective bargaining; (b) the elimination of all forms of forced or compulsory labour; (c) the effective abolition of child labour; and (d) the elimination of discrimination in respect of employment and occupation. As such, these commitments will contribute significantly to improve working conditions and improving the quality of human resources. In other word of saying, employees will have chances to improve their legal rights with regard to minimum wage, working and living environment, as well as opportunities to join association and labor forces union, as well as chances to look for new jobs. 

Secondly, EVFTA will create additional jobs for labor forces. This agreement is expected to facilitate trade between Vietnam and EU, opening new doors for Vietnam’s export, especially main products of Vietnam such as agricultural products, fisheries, footwear, textile & garment, leather products, wood, ceramics, plastics, rubber made products. For example, in the textile & garment sector, within 5 years of the FTA’s effectiveness, EU will remove the import tariffs up to 77.3% for Vietnam, the remaining 22.7% of import tariffs will be removed after 7 years. As such, Vietnam’s agricultural sector will have chance to growth and expand its scale, with that to increase the demand on labor forces. Evenly, in order to prepare for the utilization efficiently of advantages from the EVFTA, local enterprises have already planned for expanding the business scale and increase the labor forces. 

According to statistics from the Ministry of Labor – Invalid and Social Affairs (MOLISA), right after the EVFTA comes into force, the labor force in some sector will increase, for example in the mining industry the increase will be 3.41% per year; textile and garment increase of 1.53%; waterway transport (3.7%); metal production (2.65%), machine production (2.49%). 

Not only increase in quantity, but the income level of labor force is also expected to increase in period 2020 -2035, in which the highest growth rate will be for low skilled labor forces. The average income level of Vietnamese work forces will be estimated to increase by 3% from the EVFTA impact.