The enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) and EU-Vietnam Investment Protection Agreement (EVIPA) are hoped not only to lift the political and economic ties between Vietnam and the EU, but also to give Vietnam a big push to deepen its reforms and enhance foreign investors’ trust.
PM Nguyen Xuan Phuc and representative from the Vietnamese government and the EU celebrate the signing. Photo: Minh Tuan
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He expected the European Parliament and the parliament of each member state and the Vietnamese National Assembly will soon ratify the new-generation agreements, which will help EU companies access not only the Vietnamese market with nearly 100 million people but also the ASEAN, and the other 10 nations in the Comprehensive and Progressive Trans-Pacific Partnership (CPTTP), to which Vietnam is a party.
Opening up new trade and investment opportunities
Speaking at the signing ceremony in Hanoi, Commissioner for Trade Cecilia Malmström stressed the EVFTA is the “most ambitious FTA” that the EU has ever signed with a developing country as it will remove 99% of tariff lines for Vietnamese exports and the remaining 1% through tariff rate quotas within seven years since the deal’s enactment.
Vietnam is the fourth country in Asia and the second in ASEAN to strike such a deal with the 28-nation trade bloc. The two sides conducted 14 official rounds of negotiations and countless technical rounds in three years to reach the finalization in 2015.
The commitments pave the way for Vietnam to boost exports of key staples such as textiles, footwear, agricultural and aquatic products, and furniture, according to Minister of Industry and Trade Tran Tuan Anh.
Meanwhile, 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. 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.
Malmström welcomed Vietnam to free its public procurement market as European companies will be able to meet Vietnam’s rising demand with more reasonable prices. The EVIPA will better protect investors’ rights and make sure that investments will comply with demanding standards on environment and laborers’ rights.
Sharing the same view, Vietnamese Minister of Planning and Investment Nguyen Chi Dung believed that the EVIPA, with more comprehensive and balanced commitments on investment protection will enhance EU investors’ confidence in Vietnam’s attractive and safe investment environment, and vice versa.
EU Commissioner for Trade Cecilia Malmström and Romanian Minister for Business, Trade and Entrepreneurship Ștefan-Radu Oprea and Minister of Planning and Investment Nguyen Chi Dung celebrate the signing of the EVIPA. Photo: Minh Tuan
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The representatives of both the Vietnamese government and the EU were also aware of the challenges ahead as the implementation of the two agreements will need efforts from both sides.
Vietnam will launch a detailed national action program to fully realize its commitments in the two deals, said PM Phuc.
Minister of Industry and Trade noted that the signature of the two agreements is just the beginning of a new path as they require support from both Vietnam and EU bodies as well as the 28 member states’ parliaments.
He noted that the Vietnamese government will need to facilitate information access for businesses and citizens. To join this highly competitive playing field, local companies need to recalibrate their market strategies to meet the EU’s technical barriers and get prepared to deal with disputes via a system of courts, Anh suggested.
Talking to Hanoitimes, Ambassador – Head of the EU Delegation in Vietnam Bruno Angelet recommended Vietnamese companies should increase their capabilities to meet the EU’s strict technical regulations and more political dynamism is needed for the ratification of the deals.
To put the two landmark agreements into practice, the Vietnamese government will submit proposals to the National Assembly on amending a series of laws such as the Laws on Investment, Enterprises, Public Private Partnership, Land, Construction, Environmental Protection, the Labor Code and several tax laws, said Minister of Planning and Investment Nguyen Chi Dung.
