EVFTA Expected to Boost Vietnam’s GDP up to 15 percent

Nhat Trung

22:27 30/06/2019

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Vietnam, a fast-growing and competitive economy whose bilateral trade with the EU has quintupled over the past ten years, is equally keen on the deal, which could potentially boost its GDP by 15%.

EVFTA Expected to Boost Vietnam’s GDP up to 15 percent

Photo: Bloomberg

EU has been striving for a trade agreement with Vietnam for nearly a decade, this is the statement from the European Union today at the signing ceremony of EU – Vietnam free trade agreement. 
Vietnam, a fast-growing and competitive economy whose bilateral trade with the EU has quintupled over the past ten years, is equally keen on the deal, which could potentially boost its GDP by 15%.
Negotiations lasted from 2012 to December 2015. Doubts over the correct ratification procedure have delayed progress, but finally the agreement has been signed.
The European Commission has described the EVFTA as the most ambitious free trade deal ever concluded with a developing country, the following are the main points, according to the research released by the European Union. 
EVFTA near complete removes tariff barriers: elimination of over 99% of customs duties on exports in both directions.
EVFTA leads to the reduction of non-tariff barriers: Vietnam will align more closely with international standards on motor vehicles and pharmaceuticals. As a result, EU products (which already comply with these standards) will not require additional Vietnamese testing and certification procedures. Vietnam will also simplify and standardise customs procedures.
EU access to Vietnamese public procurement: EU companies will be able to compete for Vietnamese government contracts (and vice-versa).
EVFTA improves access to Vietnamese service markets: the FTA will make it easier for EU companies to operate in the Vietnamese postal, banking, insurance, environmental and other service sectors.
EVFTA increases investment access and protection: Vietnamese manufacturing sectors such as food, tyres, and construction materials will open up to EU investment. The FTA establishes an investor-state tribunal to resolve disputes between EU investors and Vietnamese authorities (and vice-versa).
EVFTA promotes sustainable development: the FTA includes commitments to implement International Labour Organization core standards (for instance, on freedom to join independent trade unions — potentially a momentous change as Vietnam does not at present have any such unions) and UN conventions (for instance, on combatting climate change and protecting biodiversity).

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