On June 30th 2019, the EU and Vietnam signed the EU - Vietnam Free Trade Agreement (EVFTA) and the EU - Vietnam Investment Protection Agreement (EVIPA) in Hanoi. The EU and Vietnam began negotiations on the EVFTA in 2012 and expect the EVFTA may enter into force before the end of 2019.
What are the benefits of the Agreement?
The European Commission states that the agreement will include the removal of 99% of customs duties on exports. Vietnam's tariff elimination schedule for goods imported from the EU will cover a period of 10 years, whereas EU tariffs applicable to Vietnam originating goods will be phased out over a period of 7 years
The EVFTA will also open up market access for services between the parties. Importantly, Vietnam has committed to phasing out the Economic Needs Test (ENT) applicable to secondary and subsequent retail establishments, five years after entry into force. Accordingly, EU retail investors will enjoy streamlined access to the Vietnam market from 2025.1
Among other things, the EVFTA also includes an intellectual property chapter and liberalisation of public procurement as well as modern transparency, sustainable development and labor provisions.