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EVFTA to substantially boost trade turnover

Released at: 15:46, 02/07/2019

EVFTA to substantially boost trade turnover

Photo: Ngoc Lan

Hanoi dialogue hears of benefits from EU trade agreement.

by Ngoc Lan

The EU-Vietnam Free Trade Agreement (EVFTA) not only improves import-export turnover and trade between Vietnam and EU member countries but also facilitates the further improvement and enhancement of the country’s economic competitiveness, Minister of Industry and Trade Tran Tuan Anh said at the Dialogue on EVFTA and the EU-Vietnam Investment Protection Agreement (EVIPA): Opportunities for Businesses, held on July 1 in Hanoi.

The EU will eliminate import tariffs on about 85.6 per cent of tariff types under the agreement, equivalent to 70.3 per cent of Vietnam’s export turnover to the EU. Seven years after it comes into force, the EU will abolish import duties on 99.2 per cent of tariff types, equivalent to 99.7 per cent of Vietnam’s export turnover.

For the remaining 0.3 per cent, the EU has committed to providing Vietnam with tariff quotas with an import tax rate of 0 per cent. Nearly all of Vietnam’s exports to the EU will no longer be subject to import taxes under a short roadmap. This is the greatest commitment a partner has given to Vietnam in its free trade agreements (FTAs).

The EVIPA strongly affirms Vietnam’s position in the international arena. When the EVFTA and EVIPA are implemented, the commitments to fairness, equality, and safe and adequate protection in each other’s investments and investors in the EVIPA will also contribute positively to building a transparent legal and investment environment. Vietnam will attract more investors from the EU and other countries as a result.

Ms. Cecilia Malmstrom, EU Commissioner for Trade, said Vietnam and the EU have committed to the effective implementation of the EVFTA and the EVIPA and will work closely together to ensure that both parties fully comply with their obligations.

However, as with other FTAs, the EVFTA will also entail certain challenges for Vietnam’s economy. According to Minister Anh, first of all, the country must commit to opening up its market to goods and services from the EU. “Some industries may narrow production in the face of competitive pressure from imports from countries with more advantages and higher development levels,” he added. “SMEs are still limited in scale, resources, and technological levels, and will be most affected by the competition.”

Representing the Vietnamese business community, Dr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), emphasized that the challenge for Vietnamese enterprises is quite large. “In a survey by VCCI, up to 70 per cent of enterprises, especially SMEs and micro-enterprises, are not interested in the EVFTA,” he said.

To seize the opportunities, Minister Anh said, along with solutions to develop high quality human resources, develop infrastructure, and improve the competitiveness of Vietnamese enterprises, the government has directed the review of and improvements to investment policies, continuing to simplify requirements and create favorable conditions for market entry and investment and business activities by people and businesses. “At the same time, Vietnamese enterprises must actively promote the application of advanced technology to improve their competitiveness in order to enter the European market quickly and effectively,” he added.

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