The EU- Vietnam Free Trade Agreement (EVFTA) will drive up Vietnamese exports to the EU as the union will eliminate over 99% of tariff lines, or 99.7% of Vietnamese exports, for Vietnamese goods to 28 member countries within seven years from the enforcement, said Minister of Industry and Trade Tran Tuan Anh.
Vietnamese Minister of Industry and Trade Tran Tuan Anh
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This is the highest level of commitment for Vietnam so far and its benefits are significant as the EU is one of the country’s largest export markets.
On the other hand, Vietnam commits to eliminate 48.5% of tariff lines for the EU’s exports, accounting for 64.5% of the exports to the EU after the enforcement and will phase out 91.8% of the tariff lines in the next seven years.
The commitments pave the way for Vietnam to boost exports in a number of commodities such as textiles, footwear, agricultural and aquatic products including rice, sugar, honey, vegetables, and furniture, the minister said.
The Ministry of Planning and Investment estimated that EVFTA would help lift the Vietnamese export turnover to the EU up 20% by 2020 and nearly 44.4% by 2030 compared to the pre-signing period of the trade deal.
The import value from the EU will also rise, however, at a lower rate than that of exports, estimated at about 15.28% in 2020 and 36.7% in 2030.
This agreement also helps Vietnam increase the GDP by an average of 2.18-3.25% in the period of 2019-2023 and 7.07-7.72% by 2033.
The minister acknowledges the challenges for Vietnam. The competition in the markets of goods and services is tougher when domestic enterprises are mainly small and medium-sized businesses. The implementation plans of the signed commitments will be devised, thus the Ministry of Industry and Trade will have to propose to the government the approval of the comprehensive action plans to put the trade deal into practice.
After the signing ceremony, which is slated to take place on June 30, the agreement will need ratification from the EU parliament by the end of this year while EU-Vietnam Investment Protection Agreement (EVIPA) will need approval from all 28 EU members, country by country.
