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Business Times appreciates new opportunities in EU-Vietnam Trade

17:05 | 13/08/2020

On August 11, the Business Times ran an article describing the EU-Vietnam Free Trade Agreement (EVFTA) as a significant economic milestone for Vietnam.

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business times appreciates new opportunities in eu vietnam trade
(Photo: VNA)

According to the article, the EU is already Vietnam’s second largest export designation. Vietnamese exports to the Eurozone have grown consistently in recent years, hitting a total of US$42.5 billion in 2018, representing a year-on-year growth rate of 11%. They comprise mainly telecommunications equipment, electronics, footwear, textiles, and food products like coffee, rice and seafood, said VOV.

With the EVFTA to take effect, 70% of Vietnamese exports will now enter the EU's 26 member states duty free. The article also added that the remaining tariff line's items will be reduced gradually over 7 years. Many firms could find opportunities to diversify or reconfigure their supply chains to deal with current issues, or guard against future risk.

The EU is already Vietnam's second largest export designation. Over the recent years, Vietnamese exports to Eurozone have grown consistently, hitting a total of US$42.5 billion in 2018, representing a year-on-year growth rate of 11 per cent. They comprise mainly telecommunications equipment, electronics, footwear, textiles, and food products like coffee, rice and seafood.

business times appreciates new opportunities in eu vietnam trade
(Photo: Business Times)

Due to rising production costs in China, Vietnam has become an attractive alternative production location. As countries reopen their economies after Covid-19, more companies will try to build new resilience into their supply chains - and Vietnam's value proposition becomes stronger by the EVFTA.

The EVFTA marks a new chapter in Vietnam-EU relations, and together with the EU-Singapore FTA, paves the way for more trade agreements with other ASEAN members and the EU, or even an ASEAN-EU multilateral FTA. As more countries joined the CPTPP, and as negotiations keep on the Regional Comprehensive Economic Partnership (RCEP), firms need to factor trade agreements into their supply chain and business planning, reported by Business Times.

Facilitation of international trade will be a driving factor in economic recovery, and it is vital that we harness the tools at our disposal to ensure this discovery proceeds smoothly. As countries reopen their economies after Covid-19, more firms will build new resilience into their supply chain and the value proposition of Vietnam becomes stronger by the EVFTA.

With Vietnam being one of the first markets in the region to ease lockdown restrictions, the country is in a prime position to capture opportunities from pent-up investment demand and shifting global production trends,” it concluded.

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