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Trade Agreement From Vietnam

It took more than eight years and a dozen rounds of dialogue for both sides to negotiate the EVFTA. Nicolas Audier, President of EuroCham in Vietnam, welcomed the results of the vote: “The EVFTA is now more important than ever, as trade wars and a global pandemic disrupt normal affairs 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 want to do business and invest with a strong, secure and prosperous nation in the heart of Asia. For products originating in the European Union, the tariff preference of the free trade agreement is given to imports into Vietnam if they provide information on the origin of registered exporters (for example. B registration in the REX system) or by an exporter for shipments worth a total of 6,000 euros. EUR.1 certificates of origin and declarations of origin are not issued or issued in the EU to benefit from the preferential scheme in Vietnam2. The free trade agreement offers reciprocal and mutually beneficial benefits to companies participating in supply chains between the EU and Vietnam. For goods exported outside the EU, the following conditions must be met in order to receive preferential treatment at the Vietnamese border or vice versa: Vietnam has overtaken its regional rivals, Indonesia and Thailand, and is the EU`s second largest trading partner in ASEAN. Today, EU companies have the opportunity to apply for contracts with Vietnamese ministries and state-owned enterprises throughout the country. Vietnam will allow European investors to award public contracts to ministries such as the Ministry of Defence, Vietnam Railways Corporation and dozens of public hospitals, under the control of the Ministry of Health. The European Commission estimates that the agreements would help increase exports to Vietnam by 29% in 2035 and increase GDP to $29.5 billion. Since the UK`s withdrawal from the EU in January, Britain has been striking on its own and negotiating new trade deals with countries that will replace the agreements negotiated by the bloc.

These trade agreements will benefit both parties and foreign investors will be able to take advantage of opportunities to invest in Vietnam. But it is still too early to conclude the positive effects of these agreements. The spotlight will now shift to how the potential benefits and losses for both parties translate into reality and on those who could earn the most. Overall, ASEAN is the EU`s third largest trading partner outside Europe, after the United States and China. Ensuring better access for EU exporters to the dynamic ASEAN market is an EU priority. Negotiations for a trade and investment agreement between the region and ASEAN began in 2007 and were interrupted by mutual agreement in 2009 to relax a bilateral negotiating format. These bilateral trade and investment agreements were designed as building blocks for a future agreement between the regions. Singapore`s history could be an example from which Vietnam can learn. In 2018, however, Harvard University economist Dani Rodrik said in the Journal of Economic Perspective that if these free trade agreements increase the volume of trade, the distribution of these benefits is another matter: “A trade agreement that is covered by another set of special interests can make things worse as easily as it makes them better.” He also wrote that “such an agreement can distract us from the effective outcome, even if it uses the cover of a free trade agreement and increases the volume of trade and investment.

Rodrik stressed that the effects of free trade agreements are fundamentally uncertain and that protectionism is depending on them.