The EU-Vietnam Free Trade Agreement (EVFTA)

EVFTA

On August 4th 2015, Vietnam and the Delegation of the European Union (EU) unveiled an agreement on the EU-Vietnam Free Trade Agreement (EVFTA) negotiations. Ministry of Industry and Trade provides brief insights on the features in EVFTA.

Introduction

In October 2010, Prime Minister of Vietnam and President of the European Union (EU) agreed to launch negotiations on the EVFTA after having settled technical issues.

Vietnam and the EU officially declared to launch negotiations on the EVFTA on June 26th, 2012. After 3 years of negotiations, with 14 official negotiation rounds and many mid-term negotiations between ministers, heads of delegations and technical groups, Vietnam and the EU have reached the final agreements on all basic points of the EVFTA.

EVFTA is a comprehensive high quality bilateral agreement between Vietnam and the EU that is suitable for the principles of the World Trade Organization (WTO) and benefits both sides. EVFTA will cover fields such as: trade in goods , rules of origin, customs duties, sanitary and phytosanitary measures (SPS), technical barriers to trade (TBT), trade in services, investment, trade remedies, competitiveness, state-owned enterprises, government procurement, intellectual property, sustainable development, human capacity building, legal issues.

Specific Areas

Trade of Goods

For Vietnamese exporters, after the EVFTA is signed and take effects, roughly 85.6% tax lines currently applied to Vietnamese products will be immediately eliminated, accounts for 70.3% of Vietnamese export to the EU. Seven years after the agreement takes effect, the EU will eliminate 99.2% of tariff lines for Viet Nam, equivalent to 99.7% of Vietnamese export turnover with the remainder of export turnover enjoying zero-duty tariff rate quotas.

On sensitive products, EU agreed to:

– On garment, textile, footwear and agricultural products (excluding canned-tuna): Over a 7-year period, duties will be eliminated. On canned-tuna, the EU agreed to set a “tariff rate quota” system, meaning tariffs applied by the EU will increase exponentially with the quantity of products imported from Vietnam on a quota basis.

– Rice: the EU agreed to set a “tariff rate quota” system on unprocessed rice and fragrant rice. Rice imported to the EU under this quote will enjoy duty free classification. The products made from rice will gradually become fully liberalized within seven years.

– Honey: the EU will eliminate tax immediately after the agreement takes effect.

– All vegetables, processed vegetables, juices, bags, suitcases, plastic products, glass and ceramic products will receive tax exemption after the agreement takes effect.

For the EU exporters, Vietnam agreed to:

– Cars and motorcycles: Vietnam commited to reduce tariffs to 0% after 9 to 10 years; motorcycles with engines larger than 150cc will be liberalized after 7 years.

– Wine, brandy, beer, chicken and pork: Vietnam agreed to eliminate tariffs in up to 10 years.

On export tariffs: Vietnam commited to eliminate most of the export tariffs on a specific roadmap; preserve export tariffs on some important products, including coal and crude oil.

Other regulatories concerning trade of goods: Vietnam and the EU also agreed upon areas related to customs duties, SPS, TBT, trade remedies,… which provide legal frameworks for cooperation, liberalization of exports and imports.

Trade in services and investments

Agreement on trade in services and investments between Vietnam and the EU seeks to an open investment environment, promoting the development of both sides. Commitments of both Vietnam and the EU go beyond the principles of WTO agreement, which represents the highest level of commitment on the EU’s recent FTAs.

Vietnam commited to provide supports for EU investors on areas such as professional services, financial services, communication, transportation, distribution services. Both sides also carried out agreements on national treatments on invesments, while drafting the clauses to resolve disputes between investors and the government.

Government Procurement

Vietnam and the EU agreed upon contents equivalent to the Government Procurement (GPA) of WTO. For obligations concerning online bidding, web portal… Vietnam had a roadmap to accomplish. The EU also promised to give technical supports for Vietnam to conduct such duties.

Intellectual Property

Intellectual Property commitments contain matters such as copyright, invention, geographic indications (GI) and medicines… In general, Vietnam commitments on intellectual property do execute the current law.

On GI, after the agreement takes affect, Vietnam will support protection of more than 160 EU’s GIs (of 28 EU member states) and EU will protect 39 Vietnam’s GIs. The Vietnam’s GIs are mostly related to agricultural products, food, which help to promote Vietnamese brands in the EU market.

Others

The EVFTA also contains Chapters on competitiveness, state-owned industries, sustainable development, cooperation and human capacity building, legal and politics. These regulatories are in accord with the Vietnam law system, providing legal framework for cooperations and development of both sides.

Source: MOIT

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Source: MOIT