After the EU-Vietnam Free Trade Agreement was put into place one year ago, Vietnamese businesses have begun to optimise opportunities brought by the deal.

The EU-Vietnam Free Trade Agreement (EVFTA) has positively impacted trade activities between the two sides.

According to the Ministry of Industry and Trade (MoIT), since the agreement took effect on August 1, 2020, trade between Vietnam and the EU has grown more than 18 percent despite COVID-19.

Luong Hoang Thai, head of the MoIT’s Multilateral Trade Policy Department, said the deal has initially met the expectations of both sides.

Vietnam’s exports to the EU in the first half of this year increased 18.6 percent year-on-year, and the country ran a trade surplus of over 11 billion USD with the market.

It is noteworthy that during negotiations, Vietnam is interested in market opportunities for small-and medium-sized enterprises (SMEs) that would face difficulties in accessing the market, he said.

Vietnam also expected to access technology intensive and quality products to better serve the demand of Vietnamese people.

Meanwhile, the EU’s exports to Vietnam during the reviewed period expanded by 18 percent, with major products like chemicals, pharmaceutical products, auto and auto spare parts shipped to the Southeast Asian nation.

He cited the Vietnamese Minister of Industry and Trade and the EU Trade Commissioner as saying that both sides have relatively implemented successfully the agreement.

Thai said in the face of COVID-19, the two sides have resorted to online trade activities, which have partially satisfied their expectations. He also noted that the initial results have created a good foundation for them to promote initiatives in the time ahead.

Apart from market opportunities in both short and long terms, the EVFTA also targets market-oriented institutional reforms, according to the official.

He cited standards imposed by the EU on the auto industry as an example, saying the standards are similar to those introduced by the United Nations (UN) and Vietnam have shifted towards them.

The move has not only realised the Government’s determination of not trading environmental and social values for economic benefits, but also pushed ahead with sustainable development.

Once Vietnam follows the standards, the country’s goods can be exported to other markets, he added.

Along with trade, the two sides have also paid heed to the medical sector, he said, stressing the EU Trade Commissioner who is also the European Commission Executive Vice President has pledged to support Vietnam in this sphere, especially in the context of the COVID-19 spread.

The MoIT said under the deal, Vietnam eliminated import duties on 48.5 percent of the tariff lines, equivalent to 64.5 percent of the EU’s exports to the country, as soon as the agreement took effect.

After that, 91.8 percent of the tariff lines, equivalent to 97.1 percent of the bloc’s exports, will have their import duties removed in seven years.

For the remaining 1.7 percent of the tariff lines, Vietnam will gradually lift duties in more than 10 years or apply the tariff-rate quota regime under the World Trade Organisation (WTO) commitments.

At present, agricultural and aquatic products, consumer goods, processed food, milk, and dairy products from the EU have yet to benefit from zero-percent tariffs in Vietnam. As livestock products hailing from the EU are still subject to the tax rate ranging 10 percent - 40 percent, imports of these commodities have grown but not at a fast pace.

However, import duties on the EU’s frozen pork, other types of pork, and chicken will be slashed to zero percent in seven, nine, and 10 years, respectively, since the EVFTA enforcement. Beef will enjoy this tax rate, from 20 - 30 percent at present, in the next three years.

Vietnam currently ranks 17th among trading partners of and 11th among exporters to the EU./.

Source: Customs News

• Vietnam's economy shows gradual recovery: WB's report
• Green Trade Frontiers and the EU’s Blueprint for Sustainable Agricultural Markets
• More efforts needed to maintain export growth to China: Insiders
• It is expected that there are higher orders and revenue in the second quarter from European businesses
• Harnessing Asia’s Free Trade Agreements