Whilst also promoting exports to the EU market, the EVFTA will have a positive impact on labour, employment, and social security to deliver direct benefits to citizens. Indeed, the trade deal is believed to help provide an additional 146,000 jobs per year, with the focus being on labour-intensive industries that have high export rates to the EU market.
Moreover, employment growth is expected to be boosted in sectors such as garments and textiles, footwear, along with air and sea transport. From the perspective of local firms, the EVFTA will open up a wealth of opportunities for further trade and investment providing they are well prepared and can devise strategies to capitalise on the benefits brought about by the trade pact.
This comes after the European Parliament voted to ratify the EVFTA on February 12 with 63% approval. In addition, the European Council also approved the EVFTA on March 30, while also concluding the final legal procedures under the EU's internal approval process. Therefore, as soon as the trade pact is adopted by the Vietnamese National Assembly, both sides will complete the notification procedures under the provisions of the trade pact so that the deal will officially come into force for both sides.
Once the EVFTA comes into force, the deal will phase out close to 99% of tariff lines and barriers to trade between Vietnam and the EU. Almost instantly tariffs on roughly two-thirds, 65%, of EU exports along with 71% of Vietnamese exports will be eliminated once the agreement enters into force, with subsequent tariffs being phased out over a decade-long implementation period.
The EVFTA agreement will streamline customs facilitation, boost the exchange of information on custom requirements, whilst also increasing investment in the modernisation and simplification of customs procedures to ensure transparency for all custom requirements. The agreement will also create new market access opportunities across a range of sectors for firms from both sides to enjoy.
With the two agreements set to enter into force in the near future, the Vietnamese market offers plenty of potential opportunities for European enterprises across almost all sectors, with a specific focus on automobile, machinery, green energy, electronics, IT, food processing, and health care.