After the first year in effect, the EU-Vietnam Free Trade Agreement brought about remarkable achievements even in the midst of an unprecedented global pandemic.
The European Chamber of Commerce hosted a webinar on July 30 to mark the first anniversary of the implementation of the EU-Vietnam Free Trade Agreement (EVFTA) with more than 200 attendees and featuring special guest speakers from the Ministry of Industry and Trade (MoIT), the Vietnamese Embassy in the EU, and the EU Delegation to Vietnam.
This historic new-generation free trade agreement was implemented on August 1, 2020. From the moment it entered into force, 65 per cent of EU exports to Vietnam and 71 per cent of Vietnamese exports to the EU became tariff-free. Over the next decade, this will rise to almost 99 per cent.
The webinar evaluated the first 12 months of implementation and discussed opportunities for further cooperation in the future.
In the first six months of 2021, the value of EU-Vietnam trade reached $27 billion. That represents an increase of more than 18 per cent compared to the same period in 2020: a remarkable achievement in the midst of a global pandemic. It should increase even further when the EU-Vietnam Investment Protection Agreement (EVIPA) enters into force, once it has been ratified in each EU member state.
However, the EVFTA includes more than tariff reductions – essential though these are. It will also support Vietnam in areas such as environmental protection, legal reform, and sustainable development. Meanwhile, the agreement opens up market access for EU investment in other sectors and industries from higher education to computer services and from distribution to telecommunications.
Despite this progress, challenges still remain. While the EuroCham’s Business Climate Index (BCI) shows that almost two-thirds of companies have benefitted from the EVFTA, it also shows that challenges such as administrative procedures and technical barriers to trade remain.
During the event, each of the four speakers reaffirmed the importance of the EVFTA and the EU-Vietnam Investment Promotion Agreement (EVIPA) to the future of EU-Vietnam trade, and proposed greater cooperation and dialogue to ensure smooth and successful implementation.
Speaking at the event, EuroCham Chairman Alain Cany said “Right now, governments around the world are focusing all their efforts on fighting the COVID-19 pandemic. However, this does not mean that we should lose sight of the EVFTA. In fact, it is now more important than ever. Because, once vaccinations have been delivered and the pandemic brought under control, our economies need to reopen and recover.”
“And, just as vaccines will help to combat this global health crisis; free, fair, and rules-based trade will help to combat the global economic crisis. For Vietnam and the EU, the EVFTA will be one of the most important tools at our disposal. This is because, now that the agreement has been implemented, both companies and consumers will be able to benefit from a gradual elimination of tariffs and a mutual opening of markets,” he noted.