EVFTA expected to bring 800,000 people out of poverty by 2030

The World Bank (WB) has predicted that the EU-Vietnam Free Trade Agreement (EVFTA) could help Vietnam’s GDP and exports grow 2.4 percent and 12 percent, respectively, by 2030, and bring 100,000 to 800,000 people out of poverty, the Ministry of Industry and Trade (MoIT) has reported.

Candy Lee

candylee10231023@gmail.com May 26, 2020 | 14:55

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evfta may help bring 800000 people out of poverty by 2030

World Bank Director Ousmane Dione (Photo: CafeBiz)

According to VNS, the World Bank (WB) has predicted that the EU-Vietnam Free Trade Agreement (EVFTA) could help Vietnam’s GDP and exports grow 2.4 percent and 12 percent, respectively, by 2030, the Ministry of Industry and Trade (MoIT) has reported.

The deal is also expected to bring 100,000 to 800,000 people out of poverty.

The WB believes Vietnam could enjoy greater benefits from joining the EVFTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) if it conducts overall economic and institutional reform to comply with their conditions.

Vietnam could optimise the deals and reap unprecedented benefits (Photo: VNA)

WB Country Director in Vietnam Ousmane Dione said Vietnam could optimize the deals and reap unprecedented benefits if. Vietnam is determined to tighten the distance in deploying ability and legal appropriateness, according to Public Opinion.

Requirements on the rules of origin are one of the challenges Vietnam needs to overcome, he said, as a number of Made-in-Vietnam products still rely on imported materials - 62 percent in electronics and 53 percent in automobiles.

He suggested that Vietnam improve links between domestic suppliers and foreign enterprises that lead global supply chains.

Vietnam will become a destination for EU and global investors because of the EVFTA (Photo: Public Opinion)

Vietnam will become a destination for EU and global investors because of the EVFTA, he added. When FDI increases, however, the number of trade complaints will also pile up.

He, therefore, advised Vietnam to launch a systematic mechanism to deal with complaints between the State and investors. At the same time, priority should be given to key currency earners post-COVID-19.

Mr. Dione also said in order to optimize benefits from EVFTA, policies supporting economic recovery after Covid-19 need to prioritize main industries that account for the most exports of Vietnam to EU.

MoIT will partner with the Ministry of Science and Technology this year to supplement and amend the revised Law on Intellectual Property 2009 and review decrees relating to the EVFTA.

From 2021-2025, it will work with the Ministry of Finance to supplement and amend the revised Law on Insurance Business 2010.

In the near future, it will popularise the complaint settlement mechanism in the EVFTA and other FTAs to which Vietnam is a member.

The EVFTA will help increase Vietnam’s export revenue to Europe by about 42.7% in 2025 and 44.37% in 2030 compared to a no-deal scenario. At the same time, the country’s imports from the EU are also expected to surge by about 33.06% and 36.7%, respectively. Experts also predicted that the EVFTA will contribute to hiking Vietnam’s GDP by 2.18-3.25% per year on average in the 2019-2023 period, 4.57-5.3% between 2024 and 2028, and 7.07-7.72% in the period from 2029-2033.

With its commitment to eliminating nearly 100% of import tariffs, the deal promises to strengthen export opportunities for Vietnam’s products of strength, such as garments & textiles, leather & footwear, rice, sugar, honey, fruit and vegetables, and wooden products. The level of commitment in the EVFTA is the highest level that Vietnam has reached among the signed FTAs so far.

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Candy Lee