Textiles and footwear stand to benefit the most from the EU-Vietnam Free Trade Agreement (EVFTA), with export revenue reaching $15.5 billion by 2035, according to a new report from the Bao Viet Securities Company (BVSC).

BVSC released the “Opportunities for key Vietnamese sectors when the EU-Vietnam Free Trade Agreement is signed and approved” report on June 26, which it tips will add 0.48 per cent to GDP growth.

Following the textile and footwear sectors, exports of food and business services are expected to increase by $902.1 million and $616.9 million, respectively, by 2035.

Due to strong competition from imports of electronics and equipment from the EU into Vietnam, the export of such goods and other types of machinery and components are expected to fall slightly, by $222.7 million and $36.3 million.

Though expected to benefit from the EVFTA, Vietnam’s textile and garment industry will have to make changes to meet origin conditions and take advantage of preferential tariffs in the agreement.

In the short term, industries such as textiles and footwear will face the same tariff levels according to the roadmap. Five years after the agreement comes into force, however, Vietnamese textiles and garments will be competitive in the European market as tariffs fall.

Vietnam’s dairy industry is expected to face competition from EU-made dairy products and their advantages in quality and food safety. But because the main product segment is somewhat skewed, the competitive pressure for Vietnam’s dairy businesses will not be overly harsh.

Fruit and vegetables and footwear are currently strengths for Vietnam, and if technical standards (especially on fruit and vegetables) can be overcome, the EVFTA will create a boost in growth for many businesses pursuing modern high-tech agriculture.

In addition to sectors that benefit directly from the roadmap of tariff reductions in the agreement, other industries will also benefit indirectly, such as logistics and enterprises in the fields of infrastructure construction and industrial park real estate.

BVSC wrote that to take advantage of trade agreements, Vietnam has to make certain that its legal framework and transport and logistics infrastructure can adapt to greater development conditions.