EVFTA after 5 years: Trade Counselor highlights gains, challenges, strategic path forward. (Illustrative image)

Speaking to the Vietnam News Agency, Phuong touted the deal's role in driving trade growth while flagging challenges that could cap its potential without swift reforms.

Since the EVFTA kicked in, trade between Vietnam and the EU jumped 46.5% to 64.6 billion USD through 2024, up from 44.1 billion USD in the prior five years, Vietnam Customs data showed.

Exports to the EU surged 56.4% to 48.7 billion USD, while imports rose 13% to 15.9 billion USD. In Germany alone, two-way trade climbed 17%, with Vietnamese exports up 20% and imports rising 13%.

Phuong attributed much of this growth to the immediate elimination of 85.6% of EU import tariffs, covering over 70% of Vietnam's export value. By 2027, 99.2% of tariff lines will be phased out, giving Vietnamese goods near-unfettered access to one of the world's largest markets. As a result, coffee exports skyrocketed 120% to 2.2 billion USD, fruit and vegetables gained 65.6% to 242 million USD, and footwear rose 52.4% to 5.65 billion USD.

Despite global disruptions, including the COVID-19 pandemic, the Russia-Ukraine conflict, and supply chain challenges, Phuong said the EVFTA has sustained Vietnam's trade momentum. Large exporters have capitalized on the agreement by improving product quality, meeting strict rules-of-origin requirements, and building sustainable brands.

Yet, challenges remain. Industries like apparel, footwear, wood, and pharmaceuticals are hamstrung by outdated production technologies, limited investment in design and branding, and difficulties in meeting the EU's stringent origin and technical standards. European demands for traceability and innovation add further pressure.

The EVFTA has also spurred institutional reform and sustainable development in Vietnam. Phuong cited key legislative efforts aligned with EVFTA commitments, including the ratification of core International Labour Organisation (ILO) conventions, the enforcement of the revised Labour Code 2021 allowing the formation of independent labour organisations outside the state-run trade union system, the adoption of the 2020 Law on Environmental Protection, active engagement with climate goals at the 26th United Nations Climate Change of the Parties, including the pledge for net-zero emissions by 2050; and the amendments to the 2022 Intellectual Property Law.

Yet, gaps in enforcement, public awareness, and corporate compliance threaten to limit the deal's upside.

Vietnamese enterprises need to act fast to upgrade production, embrace sustainability, upskill workforce and increase locally-made items, she said. "This isn't just about market access; it is a chance to overhaul Vietnam's growth model and climb global and regional value chains", she added.