Vietnam’s National Assembly approves EU – Vietnam Free Trade Agreement
|Parliament approves EU – Vietnam Free Trade Agreement|
The National Assembly (NA) today [June 8] approved the EU – Vietnam Free Trade Agreement (EVFTA) with endorsement from 100% of 457 National Assembly deputies present.
|Vietnam parliament approves trade deal with EU with endorsement of 100% National Assembly deputies. Photo: VTV.|
The NA has also approved the EU - Vietnam Investmetn Protection Agrement (EVIPA) with the approval rating of 95.45%
Following the ratification, the NA assigned the government to initiate the deal, while agreeing to apply the EVFTA with the UK until the end of the transitional period on December 31, 2020, which is subject to an extension of another 24 months.
|The implementation of the EU-Vietnam Free Trade Agreement "can’t come at a better time for Vietnam when it’s on the path of economic recovery after several months of closure due to COVID-19,” said economist Pham Chi Lan, former adviser to several of Vietnam’s prime ministers |
More than 30 years since carrying out economic reforms to integrate with the global economy, the country with a population of 95 million, is emerging to be one of the world’s next factories.
“Vietnam has to attract (investment) from countries with high technologies and upholding good corporate governance, gradually replacing the partnership with countries having outdated standards. The free trade agreement with EU will help Vietnam raise its skills and standard. It is a great opportunity for Vietnam to excel,” Lan said.
After the deal ratification, it would enter into force 30 days after the mutual notification between Vietnam and the EU on the completion of their respective legal procedures.
At the NA sitting on May 21, on behalf of Vietnam's President Nguyen Phu Trong, Vice President Dang Thi Ngoc Thinh said the EVFTA would bring mutual benefits for all parties involved, and suggested that the NA should approve the deal at the earliest possible.
The EVFTA, officially signed last June after six years of negotiations, has been dubbed “the most ambitious” FTA the EU has ever reached with a developing country, according to the European Commission. It not only includes the almost full elimination of bilateral tariffs, but also a substantial reduction of non-tariff barriers. Moreover, it includes provisions to protect intellectual property, labor, environmental standards, and fair competition, while promoting regulatory coherence.
The EU is one of Vietnam’s largest trade partners with turnover of US$56.45 billion in 2019, of which Vietnam exported goods worth US$41.54 billion and imported goods worth US$14.9 billion.
On March 30, the European Council (EC) adopted a decision on the conclusion of the EVFTA following the ratification by the European Parliament on February 12. This decision cleared the path, on the EU side, for the entry into force of the agreement.
A pre-Covid-19 study from Vietnam’s Ministry of Planning and Investment suggested the EVFTA and EVIPA would help Vietnam’s GDP grow an additional 4.6% and boost the country’s exports to the EU by 42.7% by 2025.
Meanwhile, the European Commission estimated the bloc’s GDP would be added US$29.5 billion by 2035, along with additional growth of 29% in exports to Vietnam.
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