Vietnamese lawmakers ratify trade partnership with EU

06:00 | 25/06/2020 Events

(VEN) - On June 8, 2020, deputies at the ninth session of the 14th-tenure National Assembly (NA) unanimously adopted a resolution ratifying the EU-Vietnam Free Trade Agreement (EVFTA), marking a historical milestone in Vietnam-EU relations, in particular, and Vietnam’s international economic integration process, in general. 

vietnamese lawmakers ratify trade partnership with eu

National Assembly deputies press the button for approval of the resolution ratifying the EVFTA

Integration highlight

Following a long period of negotiations, Vietnam and the EU have overcome numerous challenges and agreed on an equal partnership, despite the major development gap between the two sides.

The completion of negotiations, signing and ratification of the EVFTA reflects great efforts and strong political determination of the Communist Party and the State of Vietnam, as well as the effective coordination between different sectors at all levels to bring Vietnam-EU bilateral trade relations to a new high.

The Vietnamese NA contributed significantly to the signing of the EVFTA by issuing necessary legal documents and carrying out timely diplomatic activities to address EU interests.

According to Minister of Industry and Trade Tran Tuan Anh, the EVFTA is a highlight of Vietnam’s international integration strategy and offers more preferences than other FTAs. In its first seven years, 97 percent of tariff lines applied to Vietnam’s exports to the EU will be eliminated.

The EVFTA will also help enhance Vietnam’s competitiveness and facilitate its investment attraction efforts, creating opportunities for Vietnam to participate in the restructuring of new supply chains disrupted by the Covid-19 pandemic. In the context of complicated global trade conflicts and protectionism challenges, the EVFTA reflects mutual trust and creates a model of humane and responsible connections in the world.

The EVFTA addresses trade in goods (including general regulations and market opening commitments), rules of origin, customs and trade facilitation, food hygiene and safety measures, technical barriers to trade, trade in services (including general regulations and market opening commitments), investment, safeguard measures, competition, state-owned enterprises, government purchases, intellectual property, trade and sustainable development, cooperation and capacity building, legal and institutional issues.

PM tasked with implementation

The NA assigned the prime minister to promote EVFTA implementation and provide guidance for relevant agencies and organizations at the central and local levels in developing implementation plans. The PM was also assigned to prepare for making the most of opportunities presented by the trade pact; take suitable measures to deal with unfavorable impact of the agreement; disseminate the EVFTA contents to create awareness by the political system, businesses and people; assess implementation results and report to the NA on an annual basis.

Overall, the EVFTA will contribute to diversifying Vietnam’s export markets to prevent its heavy dependence on one market, thereby helping ensure the country’s economic security. The trade pact is predicted to have positive impact on both sides. It will eliminate import duties on nearly 100 percent of Vietnam’s export value to the EU under a short-term roadmap.

This is the highest level of FTA commitment ever made for Vietnam. Economists expect the EVFTA will create a major boost for Vietnam’s exports, helping diversify markets and products, and make Vietnam a destination for a growing numbers of investors from the EU and the rest of the world.

Big opportunities for businesses

Nguyen Van Giau, head of the NA Committee for External Relations, reported the NA deputies’ opinions and recommendations regarding ratification and implementation of the EVFTA.

Accordingly, NA deputies believe the ratification of the EVFTA is in accordance with the external relation and international integration policies of the Communist Party and the State. They regard the EVFTA as a high-standard FTA creating a potential market of 27 EU member countries, including world-leading nations in terms of trade and investment.

NA deputies emphasized that the ratification of the EVFTA requires further economic restructuring and renovation of Vietnam’s growth model to enhance national, business and product competitiveness. They believe the trade pact will encourage Vietnam’s efforts to promote its socialist-oriented market economy, accelerate administrative reform and improve the investment environment.

NA deputy Vu Tien Loc from Thai Binh Province expects the EVFTA will help Vietnamese businesses grow. To take advantage of the trade pact to boost exports to the EU, businesses need to abide by rules of origin and this requires them to restructure material supply sources.

NA deputy Duong Minh Tuan from Ba Ria-Vung Tau Province believes the EVFTA will open up major opportunities for businesses. However, businesses should also get ready to cope with new challenges.

Also on June 8, 461 of 462 voting NA deputies (95.4 percent) pressed the button for approval of the EU-Vietnam Investment Protection Agreement (EVIPA).

Quang Loc & Dinh Dung