16/11/2020
What is EVFTA? What does Vietnam get after signing this agreement?
In recent days, an event has attracted the attention of the world public, especially the public opinion of the EU and Public Opinion vietnam: The signing ceremony of the EU-Vietnam free trade agreement (EVFTA). What is EVFTA in essence? What does Vietnam get after signing the EVFTA?
What is the EU-Vietnam Free Trade Agreement (EVFTA)?
Recently, on June 30, 2019, Vietnam and the EU signed an agreement called the Eu-Vietnam Free Trade Agreement (EVFTA). EVFTA is a new generation FTA between Vietnam and 28 EU member states. The EVFTA, together with the Trans-Pacific Partnership (TPP), are the two FTA's broadest commitments and the highest level of commitment in Vietnam to date.
Vietnam's 9-year journey to negotiate and conquer EVFTA
In October 2010,the EU President and The Prime Minister of Vietnam agreed to launch negotiations on the EVFTA Agreement. In June 2012, the announcement of the start of negotiations on the new EVFTA agreement was officially announced by the Minister of Industry and Trade of Vietnam and the EU Trade Commissioner.
After more than 3 years, in December 2015, negotiations ended and began the legal review process, preparing for the signing of the Agreement. By June 2017, the review will be completed at the technical level.
September 2017:Due to a number of new issues relating to the authority to ratification of EU free trade agreements or each member state, the EU formally asked Vietnam to separate the contents of investment protection and dispute resolution mechanism between the State and investors (ISDS) from the EVFTA into a separate agreement.
Accordingly, the EVFTA will be separated into two separate agreements:
The EVFTA Free Trade Agreement is the main content of the current content, however, the investment will only include the liberalization of foreign direct investment. With this Agreement, the right to ratification and provisional implementation will be decided by the EU.
The Investment Protection Agreement (IPA) covers the contents of investment protection and settlement of investment disputes. In order to enforce the IPA, it must be ratified by both the European Parliament and the Parliaments of member states.
June 2018:The separation of EVFTA into two agreements including the Eu-Vietnam Free Trade Agreement (EVFTA) and the Investment Protection Agreement (IPA) has been officially agreed by Vietnam and the EU. At the same time, the entire legal review process for the EVFTA agreement is over and all the contents of the IPA are agreed. by August 2018, the legal review process of the IPA agreement is complete.
On October 17, 2018,the European Commission officially adopted the EVFTA and IPA.
After our efforts to negotiate with complex legal review processes, by June 25, 2019, the Council of Europe has approved the signing of the Agreements.
This is a worthy answer to our nine-year negotiation effort and a good result is that the Agreement was formally signed on June 30, 2019.
After the signing, the EVFTA also had to go through the process of ratification of the European Parliament on the basis of considering the Proposal of the European Commission by the end of 2019 in order to be able to officially come into force with the two sides. Particularly with the IPA, it takes longer because it must be approved separately by the parliaments of member countries.
What does Vietnam get after the signing of the EVFTA?
The EVFTA is a new generation of free trade agreement (FTA) under which, in addition to the provision on removing tariff barriers, this agreement also comes with broader provisions to benefit the business environment, businesses, workers and other issues between the two parties.
In particular, the most prominent is the removal of tariff barriers. As soon as the EVFTA is signed, nearly 100% of Vietnam's exports to the EU will be eliminated import tariffs and shortened export roadmap compared to before.
According to the Ministry of Industry and Trade, two agreements including the EVFTA free trade agreement and the Investment Protection Agreement between Vietnam and the European Union (IPA) are signed including commitments to treat fairly, equally, safely and adequately for investments and investors. This will contribute positively to building a transparent legal and investment environment, helping to increase the attractiveness of Vietnam's market to investors from the EU.
EVFTA consists of 17 chapters, 2 decrees and accompanying memorandums of purchase (including trade in goods, trade in services, trade defense, investment, competition, state-owned enterprises, government procurement, intellectual property...). The EVFTA is a comprehensive agreement that ensures a balance of interests for both Vietnam and the EU, which also noted the difference in development level between the two sides.
With a commitment that nearly 100% of Vietnam's exports to the EU will be eliminated import tariffs, this is the highest level of commitment in FTA agreements that Vietnam has signed with partners to date. In particular, the EU is one of the two largest and most potential export markets of Vietnam, the above benefits are even more meaningful.
For the EU, Vietnam is also a highly valued market. In praise of Malmstrom Trade Commissioner, with more than 95 million customers, Vietnam is a very potential, vibrant and promising market.
