Vietnamese government asked local businesses to upgrade upon entering EU market

Since the EU is a meticulous market, local businesses should be proactively innovative and try to meet high standards set on goods and services.
August 07, 2020 | 23:08
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The conference (Photo: VOV)

Prime Minister Nguyen Xuan Phuc made the remarks at a teleconference on August 6 to discuss the implementation of the EU-Vietnam Free Trade Agreement (EVFTA), according to VOV.

He said the trade deal sets comprehensive high standards, while also boasting a large openness that balances the interests of both sides.

The Ministry of Planning and Investment said that the EVFTA can contribute to an average GDP increase of up to 3.2% over the first five years of its implementation. This average GDP increase will rise to 5.3% over the subsequent five years and up to 7.72% ahead in the following five years.

The EVFTA is expected to provide opportunity for local enterprises to increase export turnover to the EU by 42% in 2025 and to nearly 45% in 2030 in comparison to the scenario without the agreement in place. In addition, the agreement will serve to increase the nation’s potential to attract greater FDI investment.

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Overview of the conference (Photo: Investment News)

The agreement can also create approximately 150,000 jobs annually whilst helping between 800,000 and 1 million people escape from poverty by 2030, according to a report compiled by the World Bank.

According to the latest forecast of the World Bank (WB), the world economy is expected to decline by about 5.2% in 2020. Vietnam is one of the few countries in Asia-Pacific to maintain positive economic growth, at 2.8% this year.

The EVFTA will be considered as one of the the important factors that help Vietnam maintain momentum in the context of the global and regional economic downturn, reported by Investment News.

European Commission President Ursula von der Leyen affirmed: "At present, Europe needs to seize every opportunity to revive the economy after the crisis caused by Covid-19. I strongly believe that this agreement is also an opportunity for Vietnam to move towards a prosperous economy."

Meanwhile, EU Trade Commissioner Phil Hogan said: "The EVFTA also helps to strengthen economic links between the EU and the region. This is an important factor which contributes to the economic recovery after the crisis caused by Covid-19. At the same time, the agreement once again affirmed the importance of trade policies", informed CafeF.

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The EVFTA offers opportunities for Vietnam to renovate its growth model (Photo: CafeF)

PM Phuc said that the EVFTA offers plenty of opportunities for Vietnam to renovate its growth model, motivates domestic businesses to strive for improvements, while also accepts rules to progress in the EU along with global supply chain.

Amid global economic growth affected by the novel coronavirus and the EU to suffer from an economic slowdown, PM Phuc believes the EVFTA promises to bring optimistic forecasts regarding export growth in the near future.

As the trade deal enters into effect, several Vietnamese products should compete with the EU products in the domestic market due to the removal of protection barriers.

The Government and local businesses should effectively manage the market while create a healthy business environment to meet the requirements set by the EU market.

PM Phuc added that the EU and Vietnamese goods can be considered to be supplementary for each other due to their differences in geography and development level.

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