News

EVFTA helps buffer economic downturn impact

18/10/2021    13

Given the Covid-19 epidemic, the EU-Vietnam Free Trade Agreement (EVFTA), which entered into force in August 2020, has helped to boost two-way trade and buffer the impact of the economic downturn, according to an article posted on October 13 by The Business Times of Singapore.

The article quoted the European Chamber of Commerce in Vietnam as saying that trade between Vietnam and the EU amounted to US$27 billion from January to June this year, an increase of 18 percent annually and a remarkable achievement in the midst of a global pandemic.

Last month, the Asian Development Bank (ADB) wrote in a report that it expects Vietnam's economy to expand 3.8 percent in 2021. Notably, this was a sizable downgrade from April's estimate of a 6.7 percent growth. This, however, still places Vietnam above the regional average of 3.1 percent.

According to the article, the EVFTA, the second one that the EU has concluded with an ASEAN country after Singapore, is not the only major free trade deal that is driving Vietnam's growth. In the last few years, a string of FTAs have come into force in Vietnam, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).

Officials in Vietnam said this is part of the country's long-term drive to build a modern and market-oriented economy, and signs show that this strategy is bearing fruit.

The author continued citing a World Bank report, titled Vietnam: Deepening International Integration and Implementing the EVFTA, as saying "In the case of Vietnam, the benefits have been clear in terms of high and consistent economic growth and a large reduction in poverty levels".

The article concluded that as the coronavirus pandemic subsides and international borders gradually reopen, Vietnam is eyeing an even greater wave of trade with the 27-member EU bloc. The ADB's outlook for Vietnam's economy in 2022 sees it returning close to its pre-Covid growth levels at 6.5 percent.

Source: SGGP