VINACHEM

August 1, 2020, marked a significant milestone for Vietnam and the European Union (EU) as the EU-Vietnam Free Trade Agreement (EVFTA) came into effect.

Four years on, Vietnam stands tall as the leading ASEAN exporter to the EU, reaping the benefits of a thriving economic partnership that has spurred economic growth, job creation, and consumer access to premium European products.

According to experts, the gradual elimination of import tariffs under the EVFTA has made European goods more affordable for Vietnamese consumers. Meanwhile, export-oriented sectors like apparel, footwear, and logistics have thrived, generating new jobs and upskilling the workforce.

According to the Ministry of Industry and Trade (MoIT), Vietnam’s export value to the EU has skyrocketed by nearly 50%, solidifying its position as the EU’s leading trading partner in ASEAN. Conversely, imports from the EU have also surged by over 40%.

The General Department of Vietnam Customs reported that in June alone, Vietnam's exports to the EU rose by 7.85% month-on-month and 19.54% year-on-year, surpassing 4.28 billion USD. For the first half, the figure reached over 24.69 billion USD, marking an annual rise of 15.37%. Major export items included aquatic products, fruits and vegetables, footwear, apparel, wood and wooden furniture, with the Netherlands, Germany, Italy, and Spain being the major importers.

A survey by the Vietnam Chamber of Commerce and Industry (VCCI) found that businesses are more aware of the EVFTA than other free trade agreements, with nearly half reporting specific benefits. As a result, Vietnam's export to the EU surged by 16.7% in 2022 and around 20% in 2023.

Dominik Meichle, Chairman of the European Chamber of Commerce (EuroCham) in Vietnam, hailed the EVFTA’s role in making the EU the sixth-largest foreign direct investment (FDI) source of Vietnam, with 2,450 projects worth over 28 billion EUR, despite the pending ratification of the EU-Vietnam Investment Protection Agreement (EVIPA).

The EVFTA has also improved Vietnam’s business environment, attracting more FDI from the EU and other countries. Leveraging the deal’s advantages, investment in Vietnam has soared, particularly in high-tech manufacturing and services like finance, banking, insurance, energy, telecommunications and transportation.

Hailing the EU’s status as ASEAN's third largest trade partner with two-way trade of 296.87 billion USD in 2023, and Southeast Asia’s leading FDI investor, Deputy Minister of Industry and Trade Nguyen Hoang Long said as the coordinator of ASEAN-EU economic relations and the first developing country to sign and implement a FTA with the EU, Vietnam will continue to support and advance cooperation between the two sides, especially in trade and investment, contributing to the stability and diversity of supply chains connecting the two regions, and facilitating collaboration between their business communities.

According to the Business Confidence Index released by EuroCham Vietnam in early 2024, nearly 71% of EU enterprises hold a positive outlook for their long-term operations in Vietnam./.VNA