|The EVFTA will help Vietnam raise its GDP by an average of 2.18 to 3.25%, according to a draft report outlining the trade pact which is submitted by Vice President Dang Thi Ngoc Thinh to the NA for approval
A draft report outlining the trade pact was submitted by Vice President Dang Thi Ngoc Thinh to the National Assembly for approval during the ninth session of the 14th legislature after getting underway on May 20 in Hanoi.
The EU represents the second largest import market globally and is currently the nation’s second largest export market following the United States. Through the agreement, the country will enjoy greater access to a market that has a population of over 500 million people, a GDP of approximately US$15,000 billion, and makes up 22% of global GDP.
In terms of imports, the nation’s imports from the highly lucrative market are expected to soar by 33.06% in 2025, growing by 36.7% in 2030, with a prominent focus on items such as vehicles, transport equipment, machinery and spare parts, telephones and electronic components, along with pharmaceuticals.
It is hoped that the EVFTA will lead to greater market diversification without the need to depend on a limited number of markets, whilst simultaneously serving as leverage in order to stimulate other partners to strengthen their trade and investment relations with the country.
With regard to investment, the EVFTA can be seen as an opportunity for the country to attract more investors from the EU in areas such as the local manufacturing and processing industry, high technology, clean energy, renewable energy, and services.
In terms of labour, it is anticipated that the trade deal will serve to create approximately 146,000 jobs annually. In terms of the budget revenue, it is expected that the total reduction of export tax and import tax revenue will be over VND2,500 billion, yet the increase in domestic revenue under the impact of investment, trade, and economic growth will be roughly VND7,000 billion from 2020 to 2030.
The appraisal report given by the National Assembly Committee for External Relations stated that the Government should offer a more detailed assessment of the post-COVID-19 impact of the EVFTA, especially in terms of the difficulties and challenges caused by the epidemic in relation to politics, economy, trade, social affairs culture, GDP growth, budget revenue, market narrowing, and job cuts. The Government therefore needs to calculate trends occurring in international economic development, it added.
It is imperative to come up with solutions in an effort to ensure political and economic security whilst preserving the traditional cultural identity of the nation in the process of international economic integration, the report said.
In addition, the Government should move to assess the positive and negative impacts of the EVFTA in greater detail in connection to a variety of sectors and fields in order to utilise the opportunities while minimising the negative impacts of the agreement. Moreover, a policy should be made aimed at supporting those to be most affected by the trade deal.
Based on the State President's report, the Government's report, and verification opinions, the NA Committee for External Relations has requested that the National Assembly both consider and ratify the EVFTA during the ninth session of the 14th National Assembly, while also allowing the Agreement to apply to the UK until the end of their respective transition period with the EU which concludes on December 31, 2020.
It will be possible to extend the implementation period with the UK to 24 months in accordance with the agreement that exists between the UK and the European Union with regard to UK leaving the bloc.
In order to speed up negotiations, the Government will be assigned to push forward the signing of a bilateral free trade agreement with the UK in a similar style to that of the EVFTA, with appropriate adjustments made to ensure benefits for both sides.