The Business Times on August 11 posted a story describing the EU-Vietnam Free Trade Agreement (EVFTA) as a significant economic milestone for Vietnam.

Processing tra fish for export (Photo: VNA)

According to the article, the EU is already Vietnam’s second largest export designation. Vietnamese exports to the Eurozone have grown consistently in recent years, hitting a total of US$42.5 billion in 2018, representing a year-on-year growth rate of 11%. They comprise mainly telecommunications equipment, electronics, footwear, textiles, and food products like coffee, rice and seafood. 

With the EVFTA having entered into force, 70% of Vietnamese exports will now enter the EU’s 26 member states duty free, the article said, adding that the remaining tariff lines’ items will be reduced gradually over seven years.

Many businesses could seek opportunities to diversify or reconfigure their supply chains to deal with current issues, or guard against future risk, according to the article.

As countries around the world cautiously begin to reopen their economies after COVID-19 lockdowns, more companies will seek to build new resilience into their supply chain - and Vietnam’s value proposition is further strengthened by the EVFTA, the article said.

 “With Vietnam being one of the first markets in the region to ease lockdown restrictions, the country is in a prime position to capture opportunities from pent-up investment demand and shifting global production trends,” it concluded.