Log in
Business

EU Council gives final green light to EVFTA

Once Vietnam's National Assembly also ratifies the EVFTA, the agreement can enter into force, most likely in early summer 2020.

The European Council on Monday adopted a decision on the conclusion of the EU – Vietnam Free Trade Agreement (EVFTA).

 Source: European Commission. 

This decision clears the path, on the EU side, for the entry into force of the agreement, said the organization.

Once Vietnam's National Assembly also ratifies the trade deal, the agreement can enter into force, most likely in early summer 2020, it added.

“This agreement is the second one we are concluding with a Southeast Asia country, after Singapore. It is also the most ambitious free trade agreement ever concluded with a developing country,” said Gordan Grlić Radman, minister for Foreign and European affairs of Croatia.

The EVFTA provides for the almost complete (99%) elimination of customs duties between the two blocks. 65% of duties on EU exports to Vietnam will be eliminated as soon as the FTA enters into force, while the remainder will be phased out gradually over a period of up to 10 years.

As regards Vietnamese exports to the EU, 71% of duties will disappear upon entry into force, the remainder being phased out over a period of up to seven years. The EVFTA will also reduce many of the existing non-tariff barriers to trade with Vietnam and open up Vietnamese services and public procurement markets to EU companies.

Additionally, the trade deal contains important provisions on intellectual property protection, labor rights and sustainable development. The EVFTA includes commitments to implement International Labor Organization core standards and UN conventions relating for example to the fight against climate change or the protection of biodiversity.

An investment protection agreement (IPA) was signed at the same time as the FTA, on June 30, 2019 in Hanoi. The IPA will need to be ratified by all member states according to their respective national procedures before it can enter into force. Once ratified, it will replace the bilateral investment agreements that 21 EU members states currently have in place with Vietnam.

The EU is one of Vietnam’s largest trade partners with turnover of US$56.45 billion in 2019, up 1.11% year-on-year, in which the Southeast Asian country exported goods worth US$41.54 billion and spent US$14.9 billion on imports from the EU.

A study from Vietnam’s Ministry of Planning and Investment suggested the EVFTA and EVIPA would help Vietnam’s GDP grow an additional 4.6% and boost the country’s exports to the EU by 42.7% by 2025.

Meanwhile, the European Commission estimated the bloc’s GDP would be increased by US$29.5 billion by 2035, along with additional growth of 29% in exports to Vietnam.

Reactions:
Share:
Trending
Most Viewed
Related news
CMC to build US$250 million green data center in Ho Chi Minh City

CMC to build US$250 million green data center in Ho Chi Minh City

Construction on the hyperscale data center is expected to begin in 2026.

Green logistics becomes a must for Vietnamese firms

Green logistics becomes a must for Vietnamese firms

Experts have called for greater policy dialogue, technology transfer and investment collaboration to enable Vietnamese logistics companies to implement green transformations effectively.

Coca-Cola inaugurates US$136 million green-certified plant in Vietnam

Coca-Cola inaugurates US$136 million green-certified plant in Vietnam

The new plant is the company’s largest of its three production facilities in Vietnam.

Vietnam pledges deeper reforms: Prime Minister

Vietnam pledges deeper reforms: Prime Minister

The government is transitioning from a passive management approach to an active service delivery model to optimize conditions for both citizens and enterprises.

Hoa Phat to build US$130-million industrial park in northern Vietnam

Hoa Phat to build US$130-million industrial park in northern Vietnam

The Hoang Dieu Industrial Park is poised to become a premier destination for domestic and international investors in northern Vietnam.

Vietnamese firms seek to export to South Korea

Vietnamese firms seek to export to South Korea

The goal of Vietnamese businesses aims to seek buyers and connect with strategic partners at the fair.

No eco-industrial parks certified in Vietnam

No eco-industrial parks certified in Vietnam

High costs, technological limitations, and a lack of regulatory policies prevent industrial parks from going green.

iTech Expo 2025 opens in Ho Chi Minh City

iTech Expo 2025 opens in Ho Chi Minh City

The event fosters networking and innovation amid global market shifts.