Moving forward, Vietnamese shoppers and enterprises will enjoy better deals when purchasing goods produced in the European Union (EU).
This morning, June 8, the National Assembly of Vietnam officially approved the EU-Vietnam Free Trade Agreement (EVFTA), reports Nikkei Asian Review. The trade agreement received unanimous endorsement from National Assembly members and is expected to take effect as early as August after formal ratification.
Both sides entered negotiations over the EVFTA as early as 2010, and the signing ceremony took place in Hanoi last June. MEPs in the European Parliament voted on the trade agreement in February this year.
Under the agreement, 65% of goods exported from EU members into Vietnam will be tariff-free, and so will 71% of Vietnam’s exports to the union. The remaining taxes, up to 99%, will be removed by Vietnam over 10 years, while the EU will do the same over seven years.
The economic implications of the historic deal might seem too abstract for the average buyer, but Vietnamese citizens will be able to purchase consumer goods — including cosmetics, fresh produce, and more — from Europe at more reasonable prices. The same will be true for EU-produced machinery and technical products for manufacturing enterprises in Vietnam.
At a recent conference for small- and medium-sized businesses, Industry and Trade Minister Tran Tuan Anh shared that Vietnam’s volume of imports from the EU is expected to increase by 33.1% in 2025 and 36.7% by 2030. The free trade agreement is expected to add an additional 2.2-3.3% to Vietnam’s annual economic growth rate in the first five years. This figure can increase to 4.6-5.3% in the five years after that.
Vietnam is currently Southeast Asia’s third-most populous nation and the second, after Singapore, to have reached a free-trade agreement with the EU.
[Photo: European Commissioner for Trade Cecilia Malmström (right), EU Representative Stefan-Radu Oprea (left) and Prime Minister Nguyen Xuan Phuc at the signing of the EVFTA last year/Nhat Bac via VGP News]
