Table of Contents/Mục lục
EVFTA: Key Points of the Free Trade Agreement
The EU-Vietnam Free Trade Agreement (EVFTA) marks a transformative step in trade relations between Vietnam and the EU. By eliminating or reducing tariffs and enhancing cooperation, the agreement paves the way for growth in export turnover and economic benefits for both sides. Below, we outline the key features of the EVFTA and its impact on trade.
Notable Benefits for Vietnamese Exports
When the EVFTA takes effect, the EU commits to:
- Immediate Tariff Elimination: Import duties will be removed on 85.6% of tariff lines, equivalent to 70.3% of Vietnam’s export turnover to the EU.
- Progressive Tariff Removal: Over 7 years, the EU will eliminate duties on 99.2% of tariff lines, accounting for 99.7% of export turnover.
- Remaining Tariff Quotas: For the remaining 0.3% of export turnover, Vietnam will enjoy tariff quotas with a 0% tax rate.
Key Advantages for EU Exports
Vietnam has also pledged substantial tariff eliminations for EU products:
- Immediate Elimination: Duties will be removed on 48.5% of tariff lines, equivalent to 64.5% of import turnover.
- 7-Year Roadmap: Vietnam will eliminate duties on 91.8% of tariff lines, covering 97.1% of import turnover.
- Long-Term Reduction: Within 10 years, 98.3% of tariff lines (accounting for 99.8% of import turnover) will be duty-free. For the remaining 1.7%, Vietnam will apply extended roadmaps or tariff quotas under WTO commitments.
Additional Trade Provisions
The EVFTA includes agreements on:
- Customs Procedures: Streamlining processes for exports and imports.
- SPS (Sanitary and Phytosanitary Measures): Harmonizing standards to ensure safe trade of agricultural goods.
- TBT (Technical Barriers to Trade): Reducing regulatory burdens.
- Trade Defense: Protecting businesses from unfair practices.
These measures aim to create a legal framework that facilitates smooth trade between the EU and Vietnam.
IPA Agreement: Investor Protections
The Investment Protection Agreement (IPA) complements the EVFTA by safeguarding foreign investors. Notable provisions include:
- National Treatment and Most Favored Nation Status: Ensuring fair treatment and equal rights for investors.
- Asset Protection: Commitment to prevent nationalization or acquisition of investor assets without adequate compensation.
- Dispute Resolution Mechanism: Encouraging negotiation and mediation before resorting to formal dispute resolution under IPA protocols.
- Compensation for Damages: Investors are protected from losses due to war, riots, or similar events.
Strategic Importance of EVFTA
The EVFTA and IPA agreements strengthen Vietnam’s position as a key trade partner for the EU. Businesses benefit from reduced costs, streamlined trade procedures, and increased market access.
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