The Free Trade Agreement (EVFTA), signed in Hanoi on 30 June 2019, will enter into force on 1 August 2020. The aim is to significantly simplify imports and exports in order to benefit from the Vietnamese strength of the economy. For Vietnam itself, this will allow it to be more closely linked to European trade and to open up important markets. The new free trade agreement has thus created the basis for better economic relations in order to bring the EU and the Vietnamese region together economically.
A contribution from Vietnamese growth
One of the most important criteria is Vietnam’s economic strength. Free trade is therefore expected to completely eliminate around 65 percent of the previous tariffs, which will allow the EU to export more to Vietnam. The remaining 35 percent of the tariffs will be reduced over the next ten years, including, for example, the products of wine, beef or car parts.
On the other hand, the free trade agreement is also worthwhile. 71 percent of all import duties on Vietnamese goods are immediately eliminated. After a further seven years, 99% of customs duties are to be abolished in order to ensure economic strengthening on both sides. This leads to a significant strengthening of Vietnamese products in Europe, but also to a noticeable improvement in Vietnamese exports to the EU.
Ratification as confirmation of free trade
In order to waste as little time as possible for its entry into force, ratification took place immediately after the signature of the agreement. As a result, the Vietnamese National Assembly has decreed that the free trade agreement known as EVFTA can be valid as early as early summer 2020. The specific date now is 1 August 2020, which means that mutual support in the trade in goods will not be long in coming.
Free trade between the EU and Vietnam is at this point a sign of better international relations in the economy. Such cooperation is intended to protect the rights of individual stakeholders in both environments, through the recognition of mutual standards. This also ensures more comfort and fewer dangers in everyday life for workers on site in order to make their own work appropriate and fair.
Special page: EVFTA agreement
You can find out more about the EU-Vietnam Free Trade Agreement, the so-called EVFTA, on our special pages on the agreement.
Conversions for import and export
A look at the specific content of the Investment Protection Agreement shows that, for exports from Vietnamese territory to Europe, only proof of originating status is required. This is a declaration by a registered exporter, which recognises shipments with a value of up to EUR 6,000. In the case of imports, on the other hand, proof of preference is required, which is also equivalent to the declaration of origin.
Nevertheless, there is also criticism on the basis of the new agreement. Vietnam’s political system, in particular, has been heavily criticised, as it is not a genuine democracy. The participation of a region known as a communist single state in European trade therefore does not see all those responsible as a step towards better relations. More important signals would be to ensure access to clean drinking water, fresh air and medical care. However, Vietnamese ratification did not fail, despite its own problems.[MEC id=”131624″]
Closer trade relations through the Investment Protection Agreement
The FREE trade agreement is intended to significantly improve relations around the Vietnamese economy. This can be seen even before the new Treaties enter into force, as the Investment Protection Agreement is intended to eliminate bureaucracy and effort as smoothly as possible. Free trade is therefore one of the EU’s flagship projects to promote global justice and also to improve the economic situation.
It is also part of the ratification of the new free trade that improvements in trade are also linked to an improvement in the social situation. This should be initiated, if possible before the entry into force, in order to keep a step-by-step view of the improvement of the situation. In this way, trade and change are combined so that the Vietnamese economy benefits from more exports and at the same time access to European products and goods is given.