The Vietnam-European Free Trade Association Free Trade Agreement (FTA) has been making waves in the global trade community since negotiations began in 2012. With the official signing in June 2019, the FTA has now entered into force.
This agreement marks a significant milestone for the European Union`s (EU) trade relations with Vietnam, as it is the first FTA between the EU and a developing country in Southeast Asia. The FTA aims to eliminate over 99% of customs duties on goods traded between Vietnam and the EFTA countries (Iceland, Liechtenstein, Norway, and Switzerland) in the next ten years.
The agreement is also expected to open up new opportunities for European businesses to invest in Vietnam, particularly in sectors such as financial services, telecommunications, retail, and e-commerce. Additionally, it will improve access to government procurement markets and strengthen intellectual property rights protection.
From Vietnam`s perspective, the FTA offers an important opportunity for its economy to diversify and grow. Currently, Vietnam`s top trading partners are China, the United States, and Japan. The FTA with the EFTA countries will provide Vietnamese exporters with access to an entirely new market of 14.1 million people and a combined GDP of over $1 trillion.
In terms of specific benefits for Vietnamese businesses, the FTA will provide tariff-free access to key sectors such as textiles and footwear, seafood, and agricultural products. It will also enable Vietnam to expand its manufacturing and processing industries, as well as increase its competitiveness in the global economy.
Of course, as with any trade agreement, there are concerns about potential downsides. Some critics argue that the FTA could lead to increased competition for Vietnamese businesses, particularly in sectors where they have historically been dominant. Others worry that the agreement could lead to a further widening of income inequality in Vietnam.
Overall, however, the Vietnam-European Free Trade Association Free Trade Agreement represents a significant step forward for both Vietnam and the EFTA countries. By expanding trade relations, both parties stand to benefit from increased economic growth, new investment opportunities, and improved access to key markets. As the global economy continues to evolve, agreements like this one will become increasingly important in ensuring the continued success of businesses around the world.