EU-Vietnam Free Trade Agreement

EuroCham, VCCI work together to support the implementation of the EU-Vietnam Free Trade Agreement

by Son Bui October 23, 2020

The European Chamber of Commerce (EuroCham) and the Vietnam Chamber of Commerce and Industry (VCCI) have today established a new bilateral forum to support the smooth and successful implementation of the EU-Vietnam Free Trade Agreement (EVFTA).

This new forum, known as the EU-Vietnam Business Council (EUVBC), will bring together representatives of the European and Vietnamese business communities to share insights and discuss common challenges in the implementation of this historic free trade agreement.

First envisioned after the signing of the EVFTA in Hanoi in 2019, its establishment has received high-level support from former EU Trade Commissioners Celia Malmstrom and Phil Hogan as well as Vietnam’s Minister of Industry and Trade Tran Tuan Anh.

Founded on 22 October 2020 at the VCCI headquarters in Hanoi, the launch featured speeches from VCCI Chairman Dr. Vu Tien Loc, EuroCham Chairman Mr. Nicolas Audier, and the EU Ambassador to Vietnam H.E. Mr Giorgio Aliberti. It also attracted an audience of business leaders from Vietnamese and European enterprises, as well as ambassadors from across the European Union.

Jointly led by the chairmen of EuroCham and VCCI, the board of the EUVBC will also include eight other members – with four from each chamber of commerce. The EUVBC will also establish a number of working groups for companies in similar sectors, connecting Vietnamese and European enterprises to build stronger relationships and increase knowledge-sharing in specific industries, while also helping to smooth the path for the effective implementation of the EVFTA.

The Council will publish regular papers on the progress of the implementation of the EVFTA, and meet with high-level representatives of the European Commission in Brussels and the Vietnamese Government to share updates from companies on the ground.

In force since 1 August, the EVFTA is the most comprehensive and ambitious free trade agreement ever signed between the EU and a developing nation, and just the second FTA signed with an ASEAN member state. Now it has entered into force, 65 per cent of EU exports to Vietnam are tariff-free, along with 71 per cent of Vietnam’s exports to the European Union. This will rise to almost 99 per cent over the next decade, giving Vietnamese enterprises privileged access to Europe’s large consumer market and EU business better access to Vietnam’s fast-growing sectors and industries.

“Throughout the past years, the Vietnam Chamber of Commerce and Industry (VCCI) and the European Chamber of Commerce in Vietnam (EuroCham) have been side by side, effortlessly promoted the process of negotiation, review, exchange information on the signing of the EU – Vietnam Free Trade Agreement (EVFTA). We are delighted and grateful for the determination made by the Government of Vietnam and the EU authorities over the past years for the signing of the two Agreements” Vu Tien Loc, Chairman of VCCI told the Inside Out

“The EU – Vietnam Business Council was established from the desire to support the Vietnamese business community to “enter the EVFTA highway”. On that highway, Vietnamese businesses are sure to face many difficulties. It is inevitable to feel nervous, but that will not be the reason for them to not “going to the highway”. The Council will represent the voices of Vietnamese and EU businesses in the EVFTA implementation, and acts as a bridge to bring opinions of businesses to the Government and relevant agencies of both Vietnam and the EU.

Thank Eurocham for your joint efforts with us. Thank you for the trust and support of the business community. I believe you make good use of this Agreement.” Loc added

“The EVFTA is a once-in-a-generation free trade agreement. Over the next decade, it will help to boost trade and investment between Vietnam – one of the world’s fastest-growing and most attractive markets – and the European Union, the world’s largest trading bloc. It is a true ‘win-win’ for companies and consumers on both sides.

“Now the EVFTA has entered into force, it is up to business communities on both sides to make it a success and to ensure that our enterprises and societies can both unlock its full potential. EuroCham is proud to establish this new forum with VCCI, and to reaffirm the strong and effective relationship between our two chambers at the beginning of this new chapter of EU-Vietnam trade and investment relations.” Nicolas Audier, Chairman of EuroCham, added.

By Bui Thanh Son (son2537@gmail.com) @ This story was first posted on the Inside Out

October 23, 2020 551 views

Enterprise

European car makers can now benefit from a factory in Vietnam of this FDI company

by Dung Duong September 11, 2020

Specialist silicone products manufacturer, General Silicones (TPEx: 4730), is perfectly placed to deliver the benefits of the new EU-Vietnam Free Trade Agreement (EVFTA) to European automobile makers, automotive industry suppliers, consumer electronics and other industries.

General Silicones (GS) can achieve this thanks to the company’s state-of-the-art highly-automated factory in Vietnam (a direct offshoot of GS’s Taiwan headquarters) which opened in 2018, manufacturing silicone rubber products and materials.

The EU-Vietnam Free Trade Agreement (EVFTA) removes most customs duties on trade between the EU and Vietnam. Naturally, this makes Vietnam an even more attractive manufacturing partner for European companies. The agreement, 10 years in the making, began to come into effect at the beginning of August 2020.

General Silicones (GS) Vietnam factory is located in the North of the country, and already supplies local car factories of leading Asian brands with products from three key product lines:

Silicone raw materials, Automobile silicone parts and Functional silicone sheet.

The factory is centered on an automated production line, mainly for the processing of molded silicone products, and features four 6-axis spray painting robot systems. While the factory is already fully-operational and serving customers, GS continues to upgrade and expand the facility and equipment. In the near future, the factory will also be able to provide vivid color raw materials, and perform automotive silicone product molding and various surface treating technologies, and multi-function silicone sheets and films (like ACF bonding cushion sheet, light shielding sheet, silicone foam sheet, thermal conductive sheet, electro-conductive sheet, reinforcement silicone composite sheet, and other customized sheet solution).

General Silicones Vietnam Factory

The GS Vietnam factory’s products are particularly suitable for automotive, medical, and consumer electronics industry customers. With over 50 years experience in the manufacturing of silicone products, GS is an ideal partner for the strict requirements of the automobile industry. Electronics and medical companies take as well advantage of the rich experience of GS supplying the high quality demand of Taiwan’s IT and medical Industry.

September 11, 2020 632 views

Enterprise

Here’s advantages of EVFTA, which taking effect in the next few days

by Vietnam Insider July 29, 2020

The date has been set for the landmark EU-Vietnam Free Trade Agreement (“EVFTA” or “Agreement”) to take effect on 1 August 2020. The Agreement is anticipated to bring significant advantages for enterprises, employees and consumers in both the European Union (“EU”) and Vietnam.

According to analysis carried out by the Government as well as the World Bank, Vietnam expects an increase in the country’s GDP to be 2,18 – 3,25% (years 2020 – 2023); 4,57 – 5,30% (years 2024 – 2028) and 7,07 – 7,72% (years 2029 – 2033). Concurrently, exports from Vietnam to EU are to rise 20% in 2020, the figure is to double in 2025. In addition, with the possibility of skilled laborers’ wage to rise by up to 12%, with salaries of common workers increasing by 13%, the Agreement can help lift around 800,000 people out of poverty by 2030.

The EVFTA is the most comprehensive and ambitious trade and investment agreement that the EU has ever concluded with a developing country in Asia. It is the second free trade agreement in the ASEAN region with EU, after Singapore, and it will intensify bilateral relations between Vietnam and the EU. Coupled with the trend of investors continuously withdrawing capital and production out of China in recent months, the EVFTA is contributing to turn Vietnam into the manufacturing hub of Asia.

European business in Vietnam

Under the EVFTA, Vietnam has not only opened additional sub-sectors for EU service providers, but also made commitments deeper than those outlined in the WTO, offering the EU the best possible access to Vietnam’s market. Sub-sectors that Vietnam commits to under the EVFTA (but not WTO) include: Interdisciplinary Research & Development (R&D) services; nursing services, physiotherapists and para-medical personnel; packaging services; trade fairs and exhibitions services and building-cleaning services.

Some notable provisions of the EVFTA:

Tax

Vietnam commits to eliminate import duties on 48.5% of tariff lines, equivalent to 64.5% of EU exports immediately after the Agreement comes into effect. After 7 years, import taxes on 91.8% of tariff lines (equivalent to 97.1% of EU exports) will be removed by Vietnam. After 10 years, the elimination rate will be 98.3% of the total tariff lines, equal to 99.8% of the EU’s exports respectively.

Similarly, nearly 100% of Vietnam’s exports to the EU will be eliminated import tax after 10 years. So far, this is the highest level of commitment a partner has given Vietnam in a trade agreement. This is especially meaningful when the EU has been one of the two largest export markets of the country.

Market access

For the sectors listed in each party’s Specific Schedule of Commitments, except where there is a specific reservation, the two parties undertake to not apply restrictions related to: (i) the number of businesses allowed to participate in the market, (ii) the transaction value, (iii) the number of activities, (iv) foreign capital contribution, (v) the form of legal entities, and (vi) the number of natural persons recruitment.

Public procurement packages

Under the EVFTA, Vietnam commits to allow EU contractors to participate in bidding packages that simultaneously meet the three conditions regarding Value of bidding package; Procurement agency; Goods and services require procurement.

Vietnam’s commitments on Government procurement mainly deal with the obligation to treat EU bidders, or domestic bidders with EU investment capital, equally with Vietnamese bidders when the Government purchases goods or requests a service worth over the specified threshold. Vietnam undertakes to follow the general principles of National Treatment and Non-discrimination. The EVFTA also requires its parties to assess bids based on fair and objective principles, evaluate and award bids only based on criteria set out in notices and tender documentation and create an effective regime for complaints and settling disputes. These rules require parties to ensure that their bidding procedures match the commitments and protect their own interests, thus helping Vietnam to solve its problem of bids being won by cheap but low-quality service providers.

It should be noted that Vietnam reserves the right to retain a certain proportion of the value of bidding packages for domestic contractors, goods, services and labor.

Distribution service

Vietnam has agreed to abolish the requirement of economic needs test five years after the date of entry into force of the Agreement, but Vietnam reserves the right to implement the distribution system planning on a non-discriminatory basis. Vietnam also agrees not to discriminate in the production, import and distribution of alcohol, allowing EU businesses to reserve their operating conditions under current licenses and only need one license to carry out import, distribution, wholesale and retail activities.

It should be noted that the EVFTA contains a Memorandum of Understanding concerning Bank Equity, in which Vietnam pleads to favorably consider allowing EU credit institutions to raise foreign ownership to 49% of charter capital in two Vietnamese joint stock commercial banks. This commitment, if enacted, will be valid for 5 years only (after the expiry of 5 years Vietnam will not be bound by this commitment) and is not applicable to 4 banks where the State is holding majority shares (i.e. BIDV, Vietinbank, Vietcombank and Agribank).

Vietnam will benefit more from the EVFTA compared with other such agreements, since Vietnam and the EU are considered to be two supporting and complementary markets. In other words, Vietnam exports goods that the EU cannot or does not produce itself (i.e. fishery products, tropical fruits, etc.) while the products imported from the EU are also those Vietnam does not produce domestically, including machinery, aircraft and high-quality pharmaceutical products.

Vietnam has been making visible efforts and progress to meet the high standards set out in the EVFTA. From 1 August 2020, the Agreement will create sustainable growth, mutual benefits in various sectors and be an effective tool to balance trade relations between the EU and Vietnam.

By Oliver Massmann @ Duane Morris LLP

July 29, 2020 1096 views

Enterprise

Vietnam ratified a significant trade deal with the European Union

by Neoma Simpson June 8, 2020

Vietnam ratified a free trade agreement with the European Union on Monday that will cut or eliminate 99% of tariffs on goods traded between the Southeast Asian country and the bloc, and provide Vietnam with a much-needed post pandemic boost.

Deputies in the National Assembly, which nearly always ratifies government proposals, voted by over 94% in favour of the European Union Vietnam Free Trade Agreement (EVFTA). Khanh Vu reported on Reuters

The EVFTA, expected to take effect in July, is the European Union’s second deal with a member of the Association of Southeast Asian nations (ASEAN) after Singapore, and one of few with a developing country.

According to Reuters, Vietnam will have a transition period of up to 10 years for some imports, such as cars.

It will open up Vietnam’s services, including post, banking and shipping and public procurement markets, align some standards and protect EU food and drinks, such as French champagne or Greek feta cheese, from imitations in Vietnam.

Critics in Europe have taken issue with Vietnam’s record on human and labour rights, although the deal does include commitments in those areas.

The World Bank said in May the EVFTA could boost Vietnam’s gross domestic product and exports by 2.4% and 12% respectively by 2030 and lift hundreds of thousands of people out of poverty.

“Such benefits are particularly urgent to lock in positive economic gains as they country responds to the COVID-19 pandemic,” the World Bank said.

(Reporting by Khanh Vu; Additional reporting by Phuong Nguyen; Editing by James Pearson and Matthew Tostevin)

June 8, 2020 1063 views

Trending

UK-Vietnam agreed a joint statement

by Vietnam Insider October 11, 2018

As part of events to welcome the 45th anniversary of diplomatic relations between the UK and Vietnam, Vietnamese Deputy Prime Minister and Foreign Minister Pham Binh Minh paid an official visit to the UK from 9 – 10 October 2018.

The Deputy Prime Minister had official talks with Foreign Secretary Jeremy Hunt, Chancellor of the Duchy of Lancaster, David Lidington, Secretary of State for International Trade, Dr Liam Fox and paid courtesy calls on HRH the Duke of York, Prince Andrew, and Speaker of the House of Lords, Lord Fowler.

During the visit, he also attended the UK-Vietnam Economic Forum and met some major UK companies.

UK-Vietnam Joint Statement

According to a press release by UK.GOV, on the occasion of the Vietnamese Deputy Prime Minister’s visit, the UK and Vietnam note the growing importance of collaboration in the UN, on peacekeeping, global security, international law and the illegal wildlife trade. They highly appreciate and welcome the transition of the provision of the UN Level 2 Hospital in South Sudan from UK to Vietnamese peacekeepers, and a commitment to exchange expertise in peacekeeping-related military engineering.

The UK and Vietnam are strong advocates of free trade in Europe and Asia and actively promote the early signing of the EU – Vietnam Free Trade agreement (EVFTA) in 2018. The UK and Vietnam look forward to maintaining smooth trade relations as the UK leaves the EU, including through ensuring continuity for business by transitioning the prospective EU Vietnam Free Trade agreement during the Brexit transition. Both sides also agree to consult further on the prospects of the UK joining the CPTPP.

Both sides look forward to a deeper and closer relationship between the UK and ASEAN after the UK leaves the EU. They welcome further UK funding for expertise exchanges with Vietnam on anti-corruption, culture, health, civil service capacity building and reform, infrastructure, smart cities and low carbon, maritime security, peaceful settlement of international disputes.

Both sides reiterate their commitment to the UN sanctions regime to encourage DPRK to take steps to denuclearize fully and verifiably. They reinforce the importance of maintaining the ban on the use of chemical weapons globally. They agree that adherence to international law is the foundation for peace and stability and renew their commitment to upholding existing Arbitrations and to freedom of navigation and overflight. They hold the view that countries should resolve all disputes by peaceful means, in accordance with international law and through existing legal mechanisms.

Both sides acknowledge the key role of education in the relationship including our strengthened science partnership on research, innovation and antimicrobial resistance. In pursuit of these goals, the Decision establishing the educational and cultural status of the British Council in Vietnam has been renewed. They also emphasize the importance of enhancing cooperation on bilateral cultural diplomacy so as to help strengthen the Strategic Partnership between the two countries.

Both sides express their support for the 2018 London Conference on IWT and agree on the importance of efforts to combat the illegal wildlife trade.

The UK and Vietnam have a mutual commitment to regular Ministerial visits to both countries. They agree that the next round of the Strategic Dialogue between the two countries should take place in early 2019

Read full press release on GOV.UK

October 11, 2018 426 views

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