Free Trade Agreements of Vietnam

Vietnam became the 150th member of the WTO in 2007 and, after accession, promised to fully comply with the WTO Agreements on Customs Valuation, Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) Measures. The United States and Vietnam concluded a bilateral trade agreement (FTA) in 2000, which entered into force in 2001. Vietnam has overtaken its regional rivals, Indonesia and Thailand, and is the EU`s second largest trading partner in ASEAN. Now, EU companies have the option to apply for contracts with Vietnamese ministries and state-owned enterprises across the country. Vietnam will allow EU investors to bid on public contracts for ministries such as the Ministry of Defense, the Vietnam Railway Company and dozens of public hospitals reporting directly to the Ministry of Health. The European Commission estimates that the agreements would help boost exports to Vietnam by 29% by 2035 and bring GDP to $29.5 billion. When the BTA came into effect on December 10, 2001, the United States granted Vietnamese goods and businesses immediate access to the U.S. market – a market that accounts for nearly one-third of global GDP – on the same basis as it grants to other countries with which it has normal trade relations. This means, among other things, that Vietnamese products are now valued at much lower tariffs – from an average of 40% to an average of three percent – when they enter the UNITED States. Vietnam has pledged to reform its trade and investment regime to provide a much fairer and fairer “competitive environment” for U.S.

companies and products in Vietnam. In many cases, Vietnam`s commitments are gradually being introduced over several years in recognition of the transition state of the Vietnamese economy and the important reforms needed to bring its regulatory system into line with international standards. Vietnam is a member of the Association of Southeast Asian Nations (ASEAN) and subsequently a member of the ASEAN Free Trade Area (AFTA). Under AFTA, ASEAN members (including Brunei, the Philippines, Indonesia, Laos, Myanmar, Malaysia, Singapore, Thailand and Cambodia) have committed to making the region a competitive trading area. Apart from ASEAN countries, Vietnam has also signed trade agreements with the PRC, the Republic of Korea, Australia and New Zealand, India, Chile and Japan. It signed a bilateral trade agreement with Korea in 2015, as well as a trade agreement with the Russian-led customs union bloc. In 2019, Vietnam signed a free trade agreement with the EU. This agreement entered into force in August 2020. Vietnam is currently negotiating a free trade agreement with the EFTA countries (Norway, Iceland, Liechtenstein and Switzerland). The bilateral trade and investment agreements with Vietnam concluded by the EU in March 2020 and the trade agreement are expected to enter into force during the summer after their final ratification by Vietnam. The agreements with Vietnam are the second (after those with Singapore) between the EU and a Southeast Asian country and represent a springboard for increased engagement between the EU and the region. The Agreement deepens relations between Vietnam and the European Union and was adopted by Council Decision (EU) 2020/753 of 30 March 2020 on the conclusion of the EU-Vietnam Free Trade Agreement.

[2] The agreement was signed in Vietnam on August 8. It was adopted by the Vietnamese National Assembly in June 2020 and entered into force on August 1 of the same year. [3] Both agreements were approved by Vietnamese lawmakers by a large majority of about 95% of the vote. [4] The Europe-Vietnam Free Trade Agreement (EVFTA) is a new generation free trade agreement signed between Vietnam and 27 individual EU members. The EVFTA and CPTPP are the greatest commitment and commitment to free trade agreements. The European Union-Vietnam Free Trade Agreement (EVFTA) is the second free trade agreement between the EU and an ASEAN country after Singapore. Vietnam is the second country to sign trade and investment agreements in the region. Free trade agreements can also have additional drawbacks.

Such agreements are likely to trigger aggressive competition from foreign competitors on local businesses – particularly in the agricultural sector, including meat and dairy products from the EU, Australia and Canada. It took more than eight years and a dozen rounds of dialogue for the two sides to negotiate the EVFTA. Nicolas Audier, President of EuroCham in Vietnam, welcomed the results of the vote: “The EVFTA is more important than ever as trade wars and a global pandemic disrupt normal business operations on an unprecedented scale. Free, fair and rules-based trade is the best roadmap for economic growth, and Vietnam will now have privileged access to an EU consumer market of around 500 million people who will be interested in doing business and investing in a strong, safe and prosperous country in the heart of Asia. Once these trade agreements enter into force, they will allow Vietnam to use the reduced tariffs both within the ASEAN Economic Community (AEC) and with the EU and the US to attract exporting enterprises for production in Vietnam and export to partners outside ASEAN. Vietnam`s Ministry of Planning and Investment predicted that the CPTPP could increase Vietnam`s GDP by 1.3 percentage points by 2035, while the EVFTA could increase GDP by 15 percent. These trade agreements, as well as the free trade agreements already signed and to come, should ensure that Vietnam remains competitive in the short and medium term. This agreement was signed in response to requests from both parties. The EU is a section that represents an important part of the trade relations between Vietnam and the EU. This relationship has developed rapidly and efficiently: from 2000 to 2017, the turnover of Vietnam-EU trade relations increased more than 13.8 times, from $4.1 billion in 2000 to $56.39 billion in 2019, Vietnam`s exports to the EU by 14.8 times (from $2.8 billion to $41.48 billion) and EU imports to Vietnam by more than 11.5 times ( from $1.3 billion to $14.91 billion). The U.S.-Vietnam Bilateral Trade Agreement (FTA) is a comprehensive document covering merchandise trade, intellectual property rights protection, services trade, investment protection, business facilitation, and transparency.

The 140-page agreement, which took nearly five years to negotiate and implement, is highly technical and was drafted in accordance with the World Trade Organization (WTO) and other international trade and investment principles. The BTA can essentially be reduced to an obligation on both parties to create the necessary conditions for the products, undertakings and nationals of the other party to have fair access to competition in each other`s markets. Vietnam`s accession to these trade agreements will also ensure alignment with national standards ranging from workers` rights to environmental protection. .

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