EVFTA is expected to allow Vietnamese companies to have better access to European markets, thereby ensuring Vietnam's economic security.

The trade agreement will eliminate import duties on Vietnamese goods. In return, Vietnam is expected to become more attractive to European investors. The trade agreement is expected to boost Vietnam's gross domestic product (GDP) by 2.4% and its exports by 12% by 2030. EVIPA will help Vietnam strengthen its economic and mainstream position. value in Southeast Asia and Asia-Pacific, enhancing the nation's status in ASEAN and other international organizations.

The investment protection agreement will encourage Vietnam to continue its efforts to improve the legal system and improve the investment and business environment for all investors. EVIPA will replace 21 bilateral investment protection agreements that Vietnam has with European governments. The agreement consists of four chapters, 92 articles and 13 appendices.

The ratification of the two agreements will help strengthen the relationship between Vietnam and the European Union in economic, trade and investment development.

On the same day, members of the National Assembly also passed a resolution allowing Vietnam to join the International Labor Organization's Convention 105 on the elimination of forced labor.

EVFTA provides a way for post-pandemic growth

The EU-Vietnam Free Trade Agreement (EVFTA) takes effect on August 1, becoming the most comprehensive trade agreement the European Union (EU) has signed with a developing country in Asia.

As the bloc's second free trade agreement signed with the ASEAN region, after Singapore, this agreement is expected to significantly enhance bilateral relations between Vietnam and the EU.

Driven by the ongoing tensions between the US and China, as well as the epidemic closing borders, more and more companies are turning capital and production, with EVFTA potentially turning Vietnam into a manufacturing hub. of Asia.

Under the agreement, Vietnam is not only open to EU companies, but also provides the bloc with the best market access. Under the 10-year roadmap, almost all tariff lines will be cut.

EVFTA opens up a large consumer market for Vietnamese products, especially agricultural products. According to the Ministry of Industry and Trade, exports to the EU are expected to increase by about 42.7% in 2025 and 44.37% in 2030.

As Vietnam's leading trading partner in Europe, Germany is in an important position to benefit from this agreement.

German Ambassador to Vietnam, Dr Guido Hildner, said: “The Agreement has a great positive impact on the relationship between Vietnam and the European Union on the one hand, including member states such as Germany, the other side. It takes their relationship to a higher level and opens the door for deeper cooperation.

"The agreement is not just about tariffs. It will modernize the Vietnamese economy."

The scope of the agreement could even have a global impact on Vietnam's trade environment.The aIf Vietnamese food manufacturers improve product quality to meet EU standards on safety, health, hygiene and environment, it will be possible to achieve higher export value. Their products will be more attractive and competitive, not only in the EU but also around the world,” said Dr. Hildner.

According to official data, in the first six months of 2020, Vietnam exported goods worth 18.61 billion USD to the EU, down 8.9% over the same period last year.

Big milestone

It is very important that 99% of all tariff lines will be eliminated. And this will of course be a great opportunity for German and European goods in Vietnam, because we are on the same playing field as other countries that have entered into free trade agreements with Vietnam. such as Japan, Korea. or Australia. “With the economy hit hard by COVID-19, EVFTA could help Vietnam return to its high growth rate in recent years.

Mr. Trin Duk Keen, Deputy Director of Kego Co., Ltd., a manufacturer and supplier of wood products, said: “When talking about the benefits of the deal, we often mention the tax aspect, because when the deal is In fact, the tax will be reduced to zero, especially for timber companies. According to Mr. Keen, the biggest benefit that EVFTA brings is the opportunity for development and promotion. Mr. Keene also said that we need to look at the big picture. Wood products exported to other markets do not have strict rules of origin. The EU has high quality standards, therefore, in order to export goods, businesses must meet some stringent requirements. If the business suits them, it opens up opportunities in other demanding markets. To enter this market, we must improve quality.

Bright future

The deal means more than just tax cuts, it sets the stage for a closer partnership between one of the world's largest economies and Asia's most exciting powerhouse. The German Ambassador added: “The agreement is a very modern instrument. This goes beyond the question of tariffs and concerns, for example, labor rules or environmental standards. Thus, it will give impetus to the modernization of the Vietnamese economy. There is also a human dimension. The agreement will attract people from both sides and open up space for the exchange of ideas. “With this partnership, the global downturn by 2020 is likely to be short-lived and the economic recovery closer than expected.