Modern Diplomacy: EVFTA-most comprehensive trade agreement EU concludes with developing country
11:01 | 05/08/2020

VGP - Under the new agreement (EU-Viet Nam Free Trade Agreement), the economic benefits go hand in hand with guarantees of respect for labor rights, environment protection and the Paris Agreement on climate, through strong, legally binding and enforceable provisions on sustainable development.

The EU-Viet Nam Free Trade Agreement (EVFTA) takes effect since August 1, 2020. 

Modern Diplomacy has recently released an article to mark the day the EU-Viet Nam Free Trade Agreement (EVFTA) has taken effect (August 1, 2020). 

This is the immediate effect of the entry into force of the EVFTA that will ultimately scrap duties on 99% of all goods traded between the two sides, the article highlights, adding that “Doing business in Viet Nam will also become easier for European companies: they will now be able to invest and pitch for government contracts with equal chances to their local competitors”. 

The article quoted President of the European Commission, Ursula von der Leyen, that: “The European economy needs now every opportunity to restore its strength after the crisis triggered by the coronavirus. Trade agreements, such as the one becoming effective with Viet Nam today, offer our companies a chance to access new emerging markets and create jobs for Europeans”

She expressed his belief that this agreement will also become an opportunity for people of Viet Nam to enjoy a more prosperous economy and witness a positive change and stronger rights as workers and citizens in their home country.

Meanwhile, Commissioner for Trade, Phil Hogan, commented: Viet Nam is now part of a club of 77 countries doing trade with the EU under bilaterally agreed preferential conditions.  The agreement strengthens EU economic links with the dynamic region of South-East Asia and has an important economic potential that will contribute to the recovery after the coronavirus crisis”. 

The EVFTA is the most comprehensive trade agreement the EU has concluded with a developing country, the article stressed , adding that it takes fully into account Viet Nam’s development needs by giving Viet Nam a longer, 10-year period to eliminate its duties on EU imports. 

At the same time, the trade agreement expresses a strong commitment of both sides to environment and social rights. It sets high standards of labor, environmental and consumer protection and ensures that there is no ‘race to the bottom’ to promote trade or attract investment.

The entry into force of the trade agreement has been preceded by its approval by EU Member States in the Council and its signature in June 2019, and the European Parliament’s approval in February 2020.

Viet Nam is the EU’s second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth €45.5 billion in 2019 and trade in services of some €4 billion (2018).

With a total foreign direct investment stock of €7.4 billion (2018), the EU is one of the largest foreign investors in Viet Nam. Most EU investments are in industrial processing and manufacturing.

The agreement with Viet Nam is the second trade agreement the EU has concluded with an ASEAN member state, following the recent agreement with Singapore. It represents an important milestone in the EU’s engagement with Asia, adding to the already existing agreements with Japan and the Republic of Korea.

Modern Diplomacy is an invaluable platform for assessing and evaluating complex international issues that are often outside the boundaries of mainstream Western media and academia. 

It provides impartial and unbiased qualitative analysis in the form of political commentary, policy inquiry, in-depth interviews, special reports, and commissioned research.

By Thuy Dung 

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