(Author Minh Ha, translated by TranHoaiDuc.com)
According to economic experts, the Vietnam - European Union Free Trade Agreement (EVFTA) will have a profound impact on the Vietnamese economy in the near future; contributing to making Vietnam an important "link" to link Vietnam's economy with the leading economies in the world.
The National Assembly considered approving the EVFTA Agreement at the 9th session, QH
On 12/2/2020, the European Parliament officially adopted EVFTA. In the context of extensive economic integration, the impact of this Agreement is very large, contributing to the process of economic development and innovation of Vietnamese enterprises (businesses), helping businesses Investment from other countries and Vietnam has opportunities to develop strongly in major markets around the world.
The European Union (EU) is currently the largest region in the trade relationship between Vietnam and Europe. Over the past years, Vietnam - EU trade relations have developed rapidly and effectively, from 2000 to 2019, the turnover of Vietnam - EU trade relations has increased by 13.7 times (from 1 billion USD in 2000 to 56.45 billion USD in 2019); of which, Vietnam's exports to the EU increased by 14.8 times (from US $ 2.8 billion to US $ 41.54 billion) and imports into Vietnam from the EU increased by 11.4 times (from US $ 1.3 billion to 14.90 billion USD). In 2019, import and export turnover between Vietnam and the EU reached over US $ 56.45 billion, up 1.11% over the same period in 2018.
Regarding exports, the EU is currently one of the largest export markets of Vietnam. However, Vietnam's market share of goods in this region remains modest. Economic experts forecast that the sectors that will benefit from EVFTA are Vietnam's key export sectors, while the EU still maintains high tariffs such as textiles, footwear, agricultural products. The markets with export value of over 1 billion USD in 2019 are the Netherlands (6.88 billion USD), Germany (6.56 billion USD), France (3.76 billion USD), Italy (3, $ 44 billion), Spain ($ 2.72 billion), Belgium ($ 2.55 billion) ...
In terms of imports, Vietnam is a fast growing economy with over 90 million people, a growing middle class and a dynamic young workforce. It is forecasted that EVFTA will create opportunities for Vietnam to become one of the fastest growing automotive markets in the ASEAN region in the next 20 years. According to the evaluation of the European Business Association in Vietnam (EuroCham), the implementation and impact of this Agreement will bring about significant changes in import and export between the EU and Vietnam.
In addition to benefiting from export and import, Vietnam also has great opportunities to attract foreign investment flows from EU countries. In 2019, the EU has 2,375 projects (up 182 projects compared to 2018) from 27/28 EU countries that are still valid in Vietnam with a total registered investment capital of US $ 25.49 billion (an increase of 1.19 billion USD) accounting for 7.70% of the country's projects and 7.03% of the total registered investment capital of other countries.
In particular, the Netherlands ranked first with 344 projects and 10.05 billion USD, accounting for 39.43% of total EU investment in Vietnam (up 26 projects and 692.76 million USD of investment capital). United Kingdom ranked second with 380 projects and 3.72 billion USD of total investment capital, accounting for 14.58% of total investment capital (increasing 29 projects and 210.10 million USD of investment capital). France ranked third with 563 projects and total investment capital of 3.60 billion USD, accounting for 14.13% of total investment capital (up 23 projects but decreasing 72.07 million USD of investment capital).
Especially, when implementing EVFTA, the industries of Fishery, Textile, Footwear and handbags will be cut taxes by nearly 90%, of which the tariff lines will be completely abolished. Fisheries is one of Vietnam's potential and key industries that will benefit most from EVFTA. Aquatic products from the tax rate of about 35% will be reduced to 0%. This will be a great advantage for Vietnam's fisheries industry to develop and compete with products of other countries.
Ms Nguyen Thi Minh Ngoc - Institute of International Cooperation (University of Commerce) said that in the next 10 to 15 years, with the lower import tax rates, more favorable trade facilitation mechanisms From EVFTA, Vietnamese enterprises will have an advantage over ASEAN countries when accessing the EU market. Vietnamese businesses will also benefit from the source of goods and raw materials imported with good quality and stability at a more reasonable price from the EU. In particular, there will be many opportunities to access the source of machinery, equipment, high technology / technology from EU countries, thereby helping to improve productivity and improve the quality of its products.
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