EP’s ratification of EVFTA shows trust in Vietnam

The ratification of the European Union-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA) by the European Parliament (EP) has reflected its high valuation of and trust in Vietnam as a comprehensive and important partner in all areas, not only in Asia but in the world also.
This statement was made by Minister of Industry and Trade Tran Tuan Anh during a press conference in Hanoi on February 12 following the EP’s ratification of the two documents earlier the same day.

The International Labor Organization (ILO) office in Vietnam said it welcomes the European Parliament’s ratification of the European Union-Vietnam Free Trade Agreement (EVFTA). When the EVFTA and EVIPA take effect, the agreements are expected to bring tremendous economic benefits to both the EU and Vietnam. 
The EVFTA was passed with 401 votes for, 192 votes against and 40 abstentions, and the EVIPA with 407, 188 and 53 respectively.

Under the EVFTA, Vietnam will cut 65% of import tax on EU commodities right after the deal takes effect in 2020, while the rest will be erased over a 10-year period. Meanwhile, the EU will cut more than 70% of tariffs on Vietnamese commodities from 2020, while the rest will be abolished in the seven subsequent years.

The deals are expected to raise the value of Vietnam’s EU-bound exports by 15 billion euros (16.3 billion US dollars) by 2035, and the EU’s exports to Vietnam, by more than 8.3 billion euros (9 billion US dollars) to around 22 billion euros (23.9 billion US dollars)/year.

European Parliament’s plenary session in Strasbourg, France. Photo: VNA

Harvesting dragon fruit for export at Long Tri dragon fruit cooperative in Chau Thanh district, Long An province. Photo: VNA

Processing latex for export at Dau Tieng rubber farm in Binh Duong province. Photo: VNA

Coffee is one of Vietnam’s export staples with an export value of over 1 billion US dollars/year. Photo: VNA

With the ratification of EVFTA, Vietnam can export to the EU 80,000 tons of rice a year with a zero tax rate. Photo: VNA

Processing fruit for export at Nafoods Southern Joint Stock Company. Photo: VNA 

EVFTA opens a big opportunity for Vietnam’s footwear exports to the EU. Photo: VNA

Vietnam’s garment and textile industry targets an export turnover of more than 40 billion US dollars. VNA

Tuna also is a strategic export of Vietnam to the EU. Photo: VNA

The EU imports from Vietnam, telecommunications equipment, food and clothing, while it mainly exports to Vietnam, machinery and transport equipment, chemicals and agricultural products.

“The EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA) ratified by the EP offer significant business opportunities for European enterprises”

German Federal Minister for Economic Affairs
and Energy Peter Altmaier 
“The EP’s vote to ratify the EVFTA and EVIPA at the beginning of its new tenure indicates huge mutual economic benefits,” Vietnamese Deputy Foreign Minister Bui Thanh Son said, adding that the EVFTA will create opportunities for EU businesses to access the market of a population of nearly 100 million in Vietnam and penetrate other ASEAN markets.

For Vietnam, the EU is the second largest export market. The implementation of the EVFTA is expected to help increase Vietnam’s GDP by 4.6% and its exports to the EU by 42.7% by 2025. The EP’s decision has received great applause from the business communities of both sides, according to the Deputy Minister.

Vietnam is the second Southeast Asian country after Singapore to sign trade and investment agreements with the EU. For the EU, the Southeast Asian nation also is a potential market which is willing to reform to meet new and strict standards.

After the EU’s ratification, the next and final step before EVFTA can enter into force is a vote in Vietnam’s National Assembly in April-May this year, while EVIPA still needs parliamentary approval of all EU member states. The President will submit the documents to the National Assembly at the Government’s proposal. The agreements are expected to be approved in May and take effect in July.”
Minister of Industry and Trade Tran Tuan Anh