EVFTA to boost VN competitiveness
EVFTA to boost VN competitiveness
The EU – Viet Nam free trade agreement (EVFTA) will help enhance the national competitiveness of Viet Nam, according to a report launched by the European Chamber of Commerce (Eurocham) in HCM City on Tuesday.
The report, titled “The EU – Viet Nam Free Trade Agreement: Perspective from Viet Nam”, found that 80 per cent of 132 respondents, comprising 10 per cent of Eurocham’s membership, agreed that the EVFTA was very likely or likely to enhance Viet Nam’s competitiveness compared to other countries such as China, Japan, Korea and the US.
About 72 per cent of respondents either strongly agreed or agreed that EVFTA would help Viet Nam become a hub for EU companies to access the ASEAN market.
Eurocham members hoped that the EVFTA would come into effect as soon as possible in order to benefit, the report wrote, adding that businesses had high expectations for the trade deal.
An overwhelming 93 per cent of respondents believed that the trade deal should be implemented in 2019 or as soon as possible thereafter to be of most benefit to European business in Viet Nam.
“Our members paint a positive, optimistic picture of the EVFTA. The lion’s share said that the FTA would have either a ‘significant’ or ‘moderate’ impact on their business or investment plan in both the medium (78.9 percent) and long-term (85.6 percent),” the report says.
In general, businesses still pay the most attention to trade, tariff and customs-related commitments.
The European Trade Policy and Investment Support Project predicted that, over the implementation period until 2025, Vietnam’s economic growth would be around 7 to 8 percent higher than would have been the case without the EVFTA. Vietnam’s exports to the EU were set to be 50 percent higher in 2020, with imports also seeing significant growth, according to the report.
The report also revealed that businesses believed that the trade deal, besides offering economic benefits, would have a positive impact on a range of social and environmental issues, from welfare (88 percent) and environmental protection (85 percent) to knowledge transfer (88 percent) and workers’ rights (65 percent).
After fourteen rounds of negotiation from June 2012, the two sides concluded negotiations in December 2015 and the trade deal would be presented to the European Commission and European Parliament for signature and ratification.
Once ratified and implemented, the EVFTA will trigger a gradual reduction of 99 percent of tariffs across a range of products, boosting trade even further.
The EU was the fifth-largest foreign investor in Viet Nam with almost 2,500 projects worth around US$44 billion as of 2017, according to statistics of the Ministry of Planning and Investment.
In 2017, trade in goods between the EU and Viet Nam totaled around US$54 billion.
