The EU-Vietnam Free Trade Agreement (EVFTA) is a trade agreement between the European Union (EU) and Vietnam that was signed in June 2019. The agreement is set to reduce or eliminate tariffs on goods traded between the two regions and enhance economic cooperation.
According to the agreement, over 99% of tariffs will be eliminated between the two trading blocs, resulting in a significant increase in trade volume and bilateral investment. In addition, the agreement also covers a wide range of areas, including intellectual property rights, public procurement, and sustainable development.
One of the key benefits of the EVFTA is the opportunity for European companies to have greater access to the Vietnamese market. Vietnam is a rapidly growing economy and has been one of the fastest-growing economies in Southeast Asia for the past decade, making it an attractive destination for foreign investment. The agreement is expected to provide a boost to the EU`s exports to Vietnam, which amounted to €11 billion in 2018.
Moreover, the EVFTA is expected to benefit Vietnamese businesses as well by creating new job opportunities and boosting the country`s overall economic growth. The agreement also aims to improve labor and environmental standards in Vietnam by promoting sustainable development.
While the agreement offers significant benefits to both the EU and Vietnam, it is not without its challenges. One of the key concerns is the potential impact on local industries, particularly in Vietnam, where businesses may struggle to compete with European counterparts. The agreement also comes at a time when trade tensions between the US and China are escalating, creating uncertainty for businesses and investors.
In summary, the EVFTA is a significant milestone for trade relations between the EU and Vietnam. The agreement offers numerous benefits for both sides, including increased trade volume, investment, and economic growth. While there are challenges that need to be addressed, the agreement is expected to have a positive impact on the economies of both regions.