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Vietnam-EU trade grows strongly after one year of EVFTA implementation

30/07/2021

The EU-Vietnam Free Trade Agreement (EVFTA) has been put into effect for one year, creating favorable conditions to promote strong growth in trade exchange between Vietnam and the EU.


According to the General Statistics Office, the total import-export turnover between Vietnam and the EU in the first seven months of the year reached USD 32.2 billion, an increase of USD 4.4 billion over the same period (the same period of USD 27.8 billion), in which Vietnam exported USD 22.5 billion, an increase of 15.5% and imported from the EU worth USD 9.7 billion of goods, an increase of 19.6% over the same period last year.


This growth result is thanks to the impetus from the EU-Vietnam Free Trade Agreement (EVFTA) which came into effect from August 1, 2020, has created a huge boost for Vietnam's exports, helping diversify markets and export products, especially agricultural and seafood products as well as Vietnamese products in the EU market.


At a webinar organized by the European Chamber of Commerce in Vietnam (EuroCham) on July 30 on the occasion of the one-year anniversary of the implementation of the EVFTA, Mr. Alain Cany, President of EuroCham, said that the EVFTA plays an important role in the future of trade relations between Vietnam and the EU.


As an example, the trade value between Vietnam and the EU in the first six months of 2021 reached USD 27 billion. This is an increase of more than 18% compared to the same period in 2020 and is a significant achievement in the context of the global pandemic. This number is forecast to continue to increase when the EU-Vietnam Investment Protection Agreement (EVIPA) comes into effect after this Agreement is ratified in each EU Member State.

 

According to the commitment, right at the time of entry into force, 65% of EU exports to Vietnam and 71% of Vietnam's exports to the EU shall be tax-free. Over the next decade, this number will grow to nearly 99%.


For EU exports, Vietnam commits to eliminate tariffs as soon as the Agreement comes into effect with 48.5% of tariff lines (accounting for 64.5% of import turnover). Then, after 7 years, 91.8% of tariff lines, equivalent to 97.1% of export turnover from the EU, will be eliminated from import tax by Vietnam. After 10 years, the tariff elimination level is about 98.3% of the tariff lines (accounting for 99.8% of import turnover).


This shows that taking advantage of opportunities of both Vietnam and the EU is better than other agreements signed by Vietnam in the past, reflected in both Vietnam's export turnover to the EU and EU export turnover to Vietnam.


In addition to cutting tariffs, the EVFTA also supports Vietnam in areas such as environmental protection, legal reform and sustainable development.

 

Meanwhile, the agreement opens up market access for EU investment in other sectors and industries such as higher education, computer services, distribution, and telecommunications.

 

 

Kylie Nguyen
 

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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