EVFTA ratification expected early next year

08:32 | 30/07/2018 Cooperation

(VEN) - Minister of Industry and Trade Tran Tuan Anh said Vietnam and the EU had completed the legal review process of their trade agreement (EVFTA). “If things go smoothly, the agreement will be signed later this year and submitted to the European Parliament and the Vietnamese National Assembly for ratification in early 2019,” he said.

evfta ratification expected early next year

According to Minister Tran Tuan Anh, EVFTA is a high-quality trade deal that will eliminate tariff barriers at the highest level and therefore yield significant benefits for Vietnam.

The EVFTA will eliminate tariffs for 99 percent of Vietnamese exports as soon as it takes effect, helping promote exports, especially in areas where Vietnam has advantages, such as textiles and garments, footwear, farm produce, seafood and wood products.

This is the highest-level trade liberalization commitment Vietnam has achieved so far. Currently, only some 42 percent of Vietnamese exports to the EU enjoy a zero-percent tax rate under the EU’s Generalized Scheme of Preferences (GSP). In the future, however, Vietnam will not be offered these preferences when reaching a certain level of economic development, making it very difficult for its exports to compete with products of other countries in the EU market.

Preliminary statistics show that in the first half of this year, Vietnamese exports to the EU grew 16 percent. Exports to the EU market are expected to increase by four to six percent in the first year of the EVFTA’s validity and reach about US$75 billion by 2028. Notably, textile and garment exports are forecast to reach US$1.7 billion next year and grow strongly in ensuing years. According to Minister Tran Tuan Anh, each billion USD of textile and garment exports will generate about 250,000 direct jobs. Studies by the EU also show that the EVFTA will help increase the EU’s gross domestic product (GDP) in the long term, and the increase will possibly reach 29.5 billion euros.

Minister Tran Tuan Anh emphasized that after the EVFTA is signed, the Vietnamese investment and business environment will improve and become more open, helping Vietnam attract more investment from the EU.

Ambassador Bruno Angelet, Head of the EU Delegation to Vietnam, said the EVFTA will represent significant milestones in bilateral trade and economic relations, as well as investment linkages between Vietnam and the EU.

Denis Brunetti, Co-Chairman of the European Chamber of Commerce (EuroCham) in Vietnam, believes Vietnam will remain an investment magnet for EU businesses, especially sectors such as manufacturing/production, logistics, education, healthcare and automotive industry, which contribute significantly to Vietnam’s GDP. The EVFTA promises new opportunities for Vietnamese investors and businesses to access the EU - one of the world’s largest and most dynamic markets.

Nguyen Huong