The entry into force of the EU-Vietnam Free Trade Agreement (EVFTA) on 1 August 2020 marks a turning point in trade relations between Europe and Vietnam. This ambitious treaty opens new doors for importers and exporters on both sides, with promises of increased trade, economic growth and mutual benefits. Let's delve deeper into the creation, content and opportunities that EVFTA offers for the world of import and export.
The road to the treaty
The path to the EVFTA was one of intense negotiations and strategic planning, starting in 2012. The EU, seeking to strengthen its trade relations with Southeast Asia, saw in Vietnam a growing economy with significant potential. After almost a decade of talks, the treaty was signed in 2019 and ratified in 2020, symbolizing the EU's commitment to expanding and diversifying its trade relations beyond its traditional partners.
What exactly does the EVFTA entail?
EVFTA is a comprehensive trade agreement that opens a new chapter in trade relations between the EU and Vietnam. The treaty focuses on:
- Elimination of Customs Duties: One of the most notable aspects of the EVFTA is the significant reduction or elimination of customs duties on 99% of trade goods, opening the door to increased trade.
- Non-tariff barriers: In addition to reducing tariffs, the EVFTA also addresses non-tariff barriers, leading to smoother trade processes.
- Textiles and clothing: Textiles and clothing make up a significant portion of Vietnam's exports. The EVFTA offers Vietnamese manufacturers more direct access to the European market.
- Technology and electronics: The agreement facilitates the import of high-end technology and electronic goods from Vietnam, providing opportunities for European companies looking for cost-effective, innovative products.
Opportunities for Importers
For European importers, the EVFTA not only means access to new markets, but also to a more diverse and cost-effective product offering. Importers can benefit from:
- Improved market access: With lowered trade barriers, European importers can benefit from greater access to Vietnamese products ranging from agricultural products to advanced electronics.
- Cost savings: The reduction in tariffs under the EVFTA makes Vietnamese products more price competitive, which can result in lower purchasing prices and higher margins for European companies.
- Sustainable trade practices: The EVFTA also focuses on sustainability and fair trade practices, which is in line with the growing demand for ethical and sustainable products in Europe.
Conclusion
The EU-Vietnam Free Trade Agreement is a promising development for both European importers and Vietnamese exporters. It provides a platform for increased trade, economic growth and a wider range of products in the European market. For European companies considering importing from Vietnam, this is an excellent opportunity to reap the benefits of this treaty and develop new, sustainable trade relationships. The treaty represents a step forward towards a more connected and mutually beneficial world trade.
