The impending European Union - Vietnam Free Trade Agreement (EVFTA) is poised to provide fresh impetus to the local economy, especially in the context of the nation making great strides to revive its economic outlook in the period following the novel coronavirus (COVID-19), according to insiders.

The EVFTA is expected to help Vietnam develop into a global manufacturing hub
(Photo: Trube) 

Ngo Chung Khanh, deputy director of the Ministry of Industry and Trade's (MoIT) Multilateral Trade Policy Department, emphasised the numerous benefits that the EVFTA will have when it comes into effect, noting that the EU remains the country’s leading trade partner and one of the markets that the nation enjoys a large trade surplus with.

At present, the country’s exports to the EU are subject to an average tax rate of between 9% and 15%, although the tax rate is set to be slashed to 0% in line with the seven-year roadmap when the trade agreement finally comes into effect.

With regard to the overall economic impact, the EVFTA is expected to create a favourable environment as a way of helping local firms seize upon the greater opportunities to export to major markets, therefore increasing the scale of trade between the nation and the bloc. 

Moreover, Vietnamese people will be able to enjoy industrial products from the EU at a more competitive price, whilst EU citizens will be able to gain access to Vietnamese agro-aquatic products at attractive prices.

Khanh underlined the importance of the trade pact as a means of aiding businesses as they strive to transform their business models and focus on producing high-value technology products.

Aside from creating an open market, increasing the efficiency of businesses, and improving product quality, the trade deal is expected to provide a major boost on the country’s journey to becoming a new manufacturing hub globally, serving to win the confidence of foreign investors as they choose to invest into the nation.

Ngo Chung Khanh, deputy director of the Ministry of Industry
and Trade's  Multilateral Trade Policy Department 

The MoIT representative explained that the EVFTA is a trade deal that features the highest levels of commitment, with the country undergoing numerous difficulties during the negotiation process in order to finally achieve positive results.

The MoIT has therefore finalised the formulation of guiding documents in a bid to ensure that the EVFTA is effectively implemented as a way of benefiting local businesses and people in line with the direction of the Government.

As a result of the EVFTA, the MoIT has issued information on the EVFTA through online channels in order to help localities and businesses gain a better understanding of the trade pact.

Related ministries and agencies have been working alongside the MoIT to develop necessary legal documents to ensure these files are issued immediately upon the EVFTA taking effect.

The trade official underlined the importance of supporting domestic enterprises by organising online trade exchanges as a means of helping them improve competitiveness and gain better access to the market whilst also simplifying administrative procedures to remove difficulties that local companies face.