The European Union – Vietnam Free Trade Agreement (EVFTA) will create opportunities for Vietnamese goods to penetrate a market that has a gross domestic product (GDP) of US$18 trillion, has said Minister of Industry and Trade Tran Tuan Anh.

Miniser of Industry and Trade Tran Tuan Anh  

Miniser of Industry and Trade Tran Tuan Anh made the statement at a recent press conference in Hanoi right after the European Parliament (EP) ratified the EVFTA and the EU-Vietnam Investment Protection Agreement (EVIPA).

The minister described the signing of the two agreements as important milestones in the ongoing relationship between the two sides, noting that the trade deals will be a highlight within the framework of co-operation between both parties within a world of increasing globalisation and countries becoming ever more protectionist.

He pointed out that within the context of the complicated developments in the world, the signing and ratification of the EVFTA has served to demonstrate the strong determination that exists from both sides as they look to promote bilateral relations. In addition, the trade deal will contribute to developing the Vietnam-EU relations in a comprehensive and sustainable manner.

At present, Vietnamese goods such as agricultural products, footwear, and textiles have faced a number of barriers to enter export markets due to the impact of the ongoing novel coronavirus epidemic. The EP's approval of the EVFTA and EVIPA will give a boost to the country’s export activities in the near future.

According to Minister Tuan Anh, the trade pact is expected to open up a wealth of opportunities for local goods to penetrate a market that has a GDP of US$18 trillion.

Many of Vietnam's key commodities will be allowed to make inroads into the EU market more easily as the EU is poised to reduce 85 per cent of tariff lines for Vietnamese goods from the first year, with 99 per cent of tariff lines to be abolished seven years after the deal takes effect.

With regard to the roadmap set out by the EVFTA, the MoIT representative said that according to the provisions, the EVFTA will come into effect on the first day of the second month, following both parties notifying each other on the completion of the relevant legal procedures for the entry into force of the agreement.

For the Vietnamese side, the trade deal is expected to be ratified during upcoming National Assembly session in May before coming into force from July this year.

Minister Tuan Anh affirmed that the EVFTA represents a new-generation and high quality FTA that will cover a wide range of fields, including government procurement, state-owned enterprises, public investment, and intellectual property.

With the highest levels of commitment within the signed FTAs, the EVFTA is expected to bolster the nation’s exports and GDP growth over in the coming years.

He noted that along with greater opportunities, the implementation of these FTAs, especially the new-generation FTAs, could pose numerous challenges for local businesses and the Vietnamese economy. This could come from factors such as increased competition, trade protectionism, and regulations on trade remedies.

In order to take full advantage of the opportunities brought about by the integration process, the MoIT has been working with the government and other relevant ministries, localities, and business associations to focus on deploying groups of solutions.

Accordingly, amendments to the legal system will be made in order to implement the commitments set out by the FTAs, especially for the recently signed FTAs, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EVFTA.

Minister Tuan Anh also underlined the need to improve businesses’ competitiveness by changing their mindset to adapt to the new context, and being proactive in grasping the market information whilst developing high quality human resources.

Only when firms meet the conditions and standards set out by the import markets such as the rules of origin, preferential tariffs will be effective for promoting exports, thereby accelerating the overall national economic growth, he noted.