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Signed in Hanoi on June 30, the EU-Vietnam Free Trade Agreement (EVFTA) will reduce tariffs on 99% of goods over a period of ten years, and is expected to improve the competitiveness of Vietnam’s leather sector, among others.
The EU-Vietnam trade deal was signed three-and-a-half years after trade negotiations ended in December 2015. It concerns agricultural products, limited by quotas, and is also expected to open up the public procurement and services markets in sectors such as the postal, banking and maritime. However, it is still subject to approval of the European Parliament. With the EU-Singapore deal expected to enter force later in 2019, the EU hopes to pave the way for an EU-Southeast Asia trade deal. The Commission has estimated that the agreement will boost EU exports to Vietnam by 29% and those from Vietnam to Europe by 18%.
The EVFTA is said to be a new generation FTA with higher commitments than regulations of the World Trade Organisation (WTO) with regards to market opening, protection of intellectual property rights, labour, the environment, sustainable development, and dispute resolution. The EU is to remove about 85.6% of import duties on Vietnam’s goods, equivalent to 70.3% of Vietnam's export turnover to the EU, while Vietnam commits to eliminate import duties of about 48.5% on EU goods, accounting for 64.5% of its import turnover from the economic bloc.
Vu Tien Loc, Chairman, Vietnam Chamber of Commerce and Industry (VCCI) told local media that the deal will enable the competitive edge of Vietnamese goods to rise further in the short and medium terms compared with goods of other ASEAN countries in the EU market, including in the leather sector.
On June 28, the Mercosur economic bloc and the European Union also reached an agreement for a trade deal after 20 years of negotiations, which was described by Jean-Claude Juncker, Chief of the EU Commission, as the EU’s biggest deal to date, while Jair Bolsonaro, Brazil's President, said it was "historic" and "one of the most important trade deals of all time". Read more here.
Sources: Reuters/The Guardian/Vietnam Plus