EVFTA expected to bring 3.2 billion USD in benefits to Vietnam: experts
Updated : Tuesday, October 30, 2018 11:03 AM (GMT+0700)

Thefree trade agreement between Vietnam and the EU (EVFTA) is expected to bring3.2 billion USD worth of benefits to Vietnam in 2020, while helping the SoutheastAsian nation expand export markets and engage deeper into the global valuechain, said experts.

 
Illustrative image - Source: VNA

Negotiations for the deal haveended after six years, opening great chances for Vietnamese firms to penetrateinto a promising market with a population of 508 million and total GDP of about18 trillion USD.

Before the FTA was signed, theEU had been the third largest trade partner of Vietnam and one of the twoleading export markets of the country with two-way trade reaching upwards of50.4 billion USD in 2017.

With a commitment to cuttingdown import taxes by over 99 percent, the deal will bring about great chancesfor Vietnamese firms to strengthen exports, especially in products Vietnamholds strengths in, such as garments and textiles, footwear, agro-fishery, andtimber.

In particular, products thathave never been sold in the EU due to tariff barriers will be able to accessthe market with a competitive price.

A recent research byinternational experts has shown that the FTA will help increase Vietnam’sexport revenue by 4-6 percent per year in the 10 years after it takeseffect. 

For the garment and textilessector, the deal may help raise its exports by 1.54 billion USD by 2023 and5.82 billion USD by 2028.

According to the Minister ofIndustry and Trade Tran Tuan Anh, the FTA is a high quality deal, thus thebenefits it brings are high.

Vietnam’s export revenue isexpected to rise 4-6 percent, while those of the economic sector will increaseby 19 billion USD in 2019 and 70 billion USD in 2028.

As Vietnam and the EU’s exportproducts and economic structures are supplementary without direct competition,the benefit from the deal is huge.

Minister Anh also held thatthere will be competitive pressure, including in processing, automobilemanufacturing, information technology, agriculture, and animal breeding.

However, along with theopportunities, Vietnam will also face some challenges from the FTA from 2019onwards. Enterprises who wish to export goods to the EU will have to showcertificates of origin (C/O) for their products in order to enjoy theGeneralised System of Preferences (GSP).

Tran Thanh Hai, Vice Directorof the Department of Import-Exports under the Ministry of Industry and Trade,said that the responsibility to prove the origins of goods will switch frommanagement agencies to exporters themselves.

This means enterprises willhave to process the procedures themselves, meeting the criteria for origincertificates and bear the responsibility themselves on the accuracy of thedocuments.

Statistics from the Ministryof Industry and Trade showed that Vietnam already has 2,700 enterprisesconducting export activities with the EU which are subject to GSP.

Hai asserted that beforeapplying C/O regulations on Vietnamese firms, the EU should grant about sixmonths for the firm to adapt to the new regulations.

The ministry will organisetraining courses for enterprises and grant licences to them to issue C/Os, headded.

On the other hand, the EVFTAwill create motivation and new playgrounds for EU organisations who wish toinvest in Vietnam, while contributing to the process of building modern marketinstitutions and international economic integration in Vietnam.

Minister Anh stressed the needfor Vietnamese firms to actively exploit benefits from the deal and preparethemselves for its upcoming impacts.

Source:VNA

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