FTAs expected to push VN into becoming more competitive

New free trade agreements (FTAs), which were signed and took effect in 2020, are expected to push Viet Nam into becoming more competitive by reducing trading costs and improving its business environment.

In 2020, Viet Nam’s exports to the EU decrease 2.7% against the previous year while imports from the EU pick up 3.5%, according to the General Statistics Office.

EVFTA comes into effect since August 1, 2020

The European Union-Viet Nam Free Trade Agreement (EVFTA) took effect on August 1, paving the way for increased trade between the EU and Viet Nam.

The EVFTA is an ambitious pact providing almost 99% of the elimination of custom duties between the EU and Viet Nam.

According to the Vietnamese Ministry of Planning and Investment (MPI), the FTA is expected to help increase Viet Nam’s GDP by 4.6% and its exports to the EU by 42.7% by 2025.

While the European Commission has forecasted the EU’s GDP will increase by US$29.5 billion by 2035.

Viet Nam’s National Assembly on June 8, 2020 ratified the EVFTA and the EU-Viet Nam Investment Protection Agreement (EVIPA) following almost 10 years of negotiations. 

65% of duties on EU exports to Viet Nam will be eliminated while the remaining will be gradually phased out over a period of 10 years. 71% of duties will be eliminated on Viet Nam exports to the EU, with the remaining being eliminated over a period of seven years.

RCEP inked, creating world’s largest free trade area


Nine ASEAN member countries, China, Japan and Republic of Korea-12 members of RCEP- are among largest trade partners of Viet Nam.

The Regional Comprehensive Economic Partnership (RCEP) Agreement was signed on November 15, 2020 after eight years of talks.

The trade pact involves 10 ASEAN member nations - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam, and the bloc’s partners - Australia, China, Japan, the Republic of Korea (RoK) and New Zealand.

Together, they account for around 30% of the globe's gross domestic product (GDP) and 30% of the world's population.

The agreement is expected to create the world’s largest free trade area and numerous new supply chains, and make significant contributions to regional economic recovery post COVID-19.

Soon after RCEP takes effect, members will begin to honor their commitments on tariffs. Viet Nam and its partners will remove tariffs on at least 64% of tariff lines.

After 15 to 20 years, Viet Nam will have removed 89.6% of tariff lines for partner countries which, in return, will have removed up to 92% of tariff lines for Viet Nam. Other ASEAN members will remove 85.9% of all tariffs for Viet Nam.

Telecommunications, information technology, machineries, spare parts, chemicals, and agricultural products will immediately benefit from the deal.

Aquatic products will be one of the sectors that can compete in the markets of RCEP partners.

The commitments by China, Japan, New Zealand, Australia, and other ASEAN countries to reduce tariffs to 0% as soon as the agreement takes effect will open up new opportunities for Viet Nam to increase export to RCEP markets.

UKVFTA signed, becomes effective from 23:00 on December 31


Due to Covid-19 impacts, two-way trade value between Viet Nam-UK goes down 15% in the first 10 months of 2020. 

The United Kingdom (UK)-Viet Nam Free Trade Agreement (UKVFTA) was officially inked in London, the UK on December 29 and took effect from 23.00 on December 31, 2020.

Earlier on December 11, Minister of Industry and Trade Tran Tuan Anh and UK Secretary of State for International Trade Elizabeth Truss signed the agreed minutes on the conclusion of negotiations over the UKVFTA.

The UKVFTA was negotiated based on principles that were inherited from commitments in the EU-Viet Nam Free Trade Agreement (EVFTA) and were amended in accordance with the bilateral trade framework between Viet Nam and the UK.

Thanks to the UKVFTA, interests in the bilateral trade ties within the EVFTA will be maintained. The agreement begins a new period in the two nations’ relationship, particularly in key trade sectors.

At the end of the tariff elimination roadmap, 99% of tariffs on goods traded between Viet Nam and the UK will be cut.

This means that Viet Nam will save about £114 million on exports to the UK, while the figure for the UK will be £36 million.

Trade of goods like garments and textiles, leather and footwear, and seafood will see no interruption, with commercial services like those in finance and e-commerce growing further.

Up to now, Viet Nam has signed and negotiated 17 bilateral and multi-lateral free trade agreements, 14 of which have come into force.




According to baochinhphu.vn

Related Posts

Lao Cai celebrates the 30th anniversary of the re-establishment of the province and receives the First Class Labor Medal

On the morning of September 30th, at the Provincial Convention Center, the Provincial Party Committee, the People's Council, the People's Committee, the Vietnam Fatherland Front Committee of Lao Cai province solemnly held the 30th anniversary of the re-establishment of the province (1/10/1991 -1/10/2021) and received the First Class Labor Medal.

Proud of 30 years of development of the homeland

After 30 years of re-establishment, Lao Cai has changed drastically and comprehensively in all fields. It is the result of dynamism, creativity, strong innovation, enterprising, taking responsibility; the solidarity to cooperate to contribute to the non-stop construction of the whole political system, the officers and people of ethnic groups in Lao Cai province. Every officer, party members and...

Feelings of the young generation before the 30th anniversary of the re-establishment of the province

As living and working in Lao Cai, witnessing the change of our homeland, we - the young generation of Lao Cai can't help but touched and proud of the great achievements that the whole province has achieved.

Speech of General Secretary Nguyen Phu Trong

Speech of General Secretary Nguyen Phu Trong at a national virtual conference on reviewing the five-year implementation of the Directive No.05-CT/TW of the Politburo on promoting the studying and following President Ho Chi Minh’s ideology, morality and lifestyle.

Vietnam rose in Asia Power Index

According to the Asia Power Index (Asia Power Index) in 2020 of the Lowy Institute, Australia's leading foreign policy research institute, Vietnam's power ranking increased by one level compared to last year, to 12 out of a total of 26 countries and territories assessed.

UNDP supports flood-proof safe houses in Central Vietnam

UNDP has raised $ 100,000 from emergency resources and will continue to support flood-vulnerable and vulnerable people by building safe houses that are flood-resistant.