Vietnam sets sights on EVFTA to ease economic rehabilitation after pandemic

06:00 | 10/04/2020 EVFTA

(VEN) - Vietnam is hoping its ambitious trade agreement with the European Union, expected to enter into force this coming summer, will help it get back on its feet once the Covid-19 pandemic is controlled. 

vietnam sets sights on evfta to ease economic rehabilitation after pandemic

Completing procedures

The EU-Vietnam Free Trade Agreement (EVFTA) is like an “expressway” connecting Vietnam and Europe that will speed up trade and investment cooperation between the two sides and offer opportunities for businesses. It will help Vietnamese businesses find the fastest access to European consumers.

Given the spread of Covid-19, Vietnamese businesses are looking forward to the effect of the trade deal, helping open the door for Vietnam’s exports to the EU market. Vietnam’s export growth in the second half of 2020 may be better as the pandemic draws to a close and the trade deal comes into effect.

Nguyen Thi Thu Trang, director of the WTO and Integration Center under the Vietnam Chamber of Commerce and Industry (VCCI), said the EVFTA will help Vietnamese goods reach their destination faster than those of competitors. Luong Hoang Thai, director of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, said ratification of the EVFTA by the National Assembly is important to help Vietnamese businesses overcome the effects of the Covid-19 pandemic.

If the pact is approved at the coming National Assembly meeting in May, work must start on the legal framework immediately. Policies and regulations must be prepared and ready so they can become effective once the trade deal is passed. If the National Assembly passes and Vietnam can promptly notify the EU, the EVFTA will officially come into effect on July 1.

Ministries and agencies need to start studying EUs rules on imports so that they can help business take advantage of the trade pact’s many opportunities, Thai said, adding that the government, ministries, agencies and businesses must improve their competency to meet European market standards.

Active approach

The EVFTA is like an “expressway” connecting Vietnam and Europe, but for now, few businesses can travel on the expressway. Businesses that identify Europe as their target market need a methodical approach. In addition, businesses need to build supply chains with the participation of leading firms.

In general, Vietnamese businesses are less competent than European companies but they still have advantages in some fields, Trang said, adding that Vietnamese and European products are supplemental, not alternates. She also said accepting opportunity costs would help local businesses hit European markets faster, meaning that Vietnamese businesses need to make changes in production and purchasing of raw materials from local suppliers instead of foreigners in order to meet the terms of the agreement.

The Ministry of Industry and Trade has directed units to develop a two-phase action plan. The first is from now until the EVFTA ratification by the National Assembly, while the second will start once the deal takes effect, with major measures on strengthening trade promotion activities. “The ministry’s action plan is very detailed. In the immediate future, we are focusing on supporting businesses, such as disseminating information about the deal’s requirements and Vietnam’s commitments, so that businesses can easily access European markets once the trade deal is official,” Thai said.

Nguyen Huong