Vietnam’s Parliament Passes Free Trade Deal with European Union

The National Assembly of Vietnam has ratified the EU-Vietnam Free Trade Agreement (EVFTA) with no veto on June 8. The pact is expected Vietnam to slash 99% of its import tariffs over 10 years, as well as the EU that will do the same over seven years.

 

The Vietnamese Parliament’s vote followed approval by the European Parliament in February. The agreement is expected to go into effect as early as July after all governments approve it, according to the website of the Vietnam Chamber of Commerce and Industry.

 

Under the agreement, Vietnam will cut 65% of import tax on EU commodities after the deal takes effect, while the rest will be erased over a 10-year period. Meanwhile, the EU will cut more than 70% of tariffs on Vietnam’s commodities after the deal takes effect, while the rest will be abolished over the seven subsequent years, said the Vietnamese government. 

 

The deals could reinforce Vietnam’s GDP to expand by 2.4% and give exports a 12% boost, bringing 100,000 – 800,000 people out of poverty by 2030, according to a World Bank report released in May. 

 

Currently, Vietnam is the second largest exporter, among the ASEAN members, to the EU. Trade between the EU and Vietnam hit US$56.45 billion last year, and in 2019, Vietnam had exported to Europe valued US$41.5 billion, accounting for 16% of the nation’s shipments.