Vietnam National Assembly unanimously backs EVFTA ratification

VOV.VN - All National Assembly deputies attending the June 8 plenary session in Hanoi unanimously agreed to endorse the European Union – Vietnam Free Trade Agreement (EVFTA) – a landmark agreement for both sides.

vietnam national assembly unanimously backs evfta ratification hinh 0
The Vietnam National Assembly ratifies the EU-Vietnam Free Trade Agreement - a landmark agreement for both sides 

The trade agreement is anticipated to bring about a range of benefits for both sides, including almost 100% of future exported Vietnamese products to the EU set to enjoy tax abolition in the near future. This marks the highest level of commitment granted by the EU in any of its previously signed FTAs.

Following the trade deal’s ratification, Vietnamese exports are poised to enjoy a boost through the diversification of its market places and guarantees placed on the country’s overall economic security. As such, the country is expected to develop into an attractive destination for financiers from both the EU and territories globally.

The EVFTA is expected to raise the country’s GDP growth rate by 2.18% to 3.25% over the course of the first five years of its implementation, in addition to a further rise of between 4.57% and 5.30% over the following five years, along with a 7.07% to 7.72% boost in the subsequent five-year period.

With the EU being the second largest import market worldwide, it is currently the second largest export market for Vietnamese products after the United States. Therefore, the EVFTA will allow the country to gain access to a potential market of over 500 million consumers, with a GDP of approximately US$15,000 billion, accounting for 22% of global GDP.

As well as providing a boost for exports, EU imports are expected to increase by 33.06% in 2025 and by 36.7% five years later, with a specific focus placed on a number of key items including vehicles and transport equipment, machines and spare parts, mobile phones and electronic components, and pharmaceuticals.

The agreement with the bloc is set to offer the country the chance to attract EU investors in areas such as processing and manufacturing industries which utilise high technologies, renewable energy, and services.  

Moreover, it is anticipated that the deal will generate an additional 146,000 jobs annually while helping between 100,000 and 800,000 people escape poverty by 2030.

Moments after the trade agreement was ratified, lawmakers swiftly confirmed the EU-Vietnam Investment Protection Agreement (EVIPA) with 95.6% share of the vote.

Together with EVFTA, the EVIPA will continue to affirm the country’s important geopolitical position in Southeast Asia, as well as the Asia-Pacific region, therefore serving to elevate the country’s status as a regional power.

The EVIPA will require the country to continue perfecting its institutional and policy system in order to improve its investment and business environment in a favourable, equal, safe, transparent, and more friendly manner to investors from all economic sectors.

The agreement will replace the 21 existing bilateral investment promotion and protection agreements that exist between Vietnam and EU member states.

The EVFTA is scheduled to take effect in August, while the EVIPA must now be approved by the parliaments of the 27 EU member states after the UK completes its Brexit.