European Union Signs Historic Freetrade Agreement Viet Nam. The Value Of The Deal Totals $50 Billion
The Council of the European Union has approved the ambitious free trade agreement with Viet Nam. Industrial tariffs can thereby soon be eliminated, and binding high standards for climate change mitigation, employee rights and fair competition will be put in place.
With a trade volume of more than 50 billion euros, Viet Nam is currently the EU’s second most important trade partner in South East Asia. The EU is Viet Nam’s fourth-largest trade partner. Between 2014 and 2018, bilateral trade in goods already grew at an annual rate of 15%. Once the EVFTA has been ratified by Viet Nam’s National Assembly, it could enter into force in the early summer of 2020.
With the EVFTA now in force, both parties’ current tariffs on industrial products will be completely eliminated. Nearly all tariffs on agricultural products will also be eliminated. Non-tariff barriers like technical specifications and licensing conditions will be reduced, with both sides undertaking to recognise common international standards.
Through the EVFTA, Viet Nam agrees to respect the fundamental principles of the International Labour Organization (ILO), including freedom of association and the ban on child and forced labour, and to push on with ratifying all fundamental ILO conventions. The EVFTA also includes binding provisions on the implementation of multilateral environmental accords such as the Paris Climate Agreement; civil-society groups will be involved in monitoring the steps towards implementation on both sides.
In light of its dynamic economic development and with a population of 95 million, Viet Nam is an important economic partner for the EU in South East Asia. Viet Nam has undergone a remarkable economic upturn since the early 1980s, reaching high growth rates of up to 9.5% (1995). At 6.5%, the current economic growth rate in Viet Nam is higher than that in China. As a result of this upswing, Viet Nam has managed to cut the poverty rate from over 50% (1996) to less than 10% today. With gross per capita national income of 2400 US dollars, Viet Nam has been denoted a “middle-income country” since 2018.
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