EU trade deal boosts Vietnam exports31/07/2023
The EU – Vietnam Free Trade Agreement (EVFTA) has had positive impacts on Vietnamese businesses since it took effect on August 1, 2020.
As the first FTA between Vietnam and the EU, the EVFTA is likened to an important highway connecting Vietnam with the 27 EU economies. This is also a new-generation and the second-highest-standard FTA that Vietnam has signed, with commitments covering different fields, a strong degree of liberalization and a higher level of commitment than most of the FTAs that Vietnam has joined.
A 2022 survey by the Vietnam Chamber of Commerce and Industry’s (VCCI) Center for WTO and Integration showed that Vietnam earned an export revenue of US$83.4 billion from August 2020 to July 2022, an average of US$41.7 billion per year, 24 percent higher than the 2016-2019 period’s. 14.8 percent of Vietnam’s exports benefited from the EVFTA in 2020, with the rate reaching 20.2 and 24.5 percent in 2021 and the first half of 2022, respectively.
Regarding enterprises’ awareness of EVFTA, almost 94 percent of the surveyed said they have heard or known about the agreement, the highest percentage among the FTAs in which Vietnam is a signatory. Specifically, of every 10 surveyed businesses, three know quite well and one knows very well about EVFTA commitments related to their operations. This is attributed to the agreement’s efficient promotion by relevant state organizations, including the VCCI, as well as media agencies.
Nearly 41 percent of the surveyed said they had benefited from the EVFTA, mostly the agreement’s export and import tariff incentives. They said the agreement helped increase orders, revenues and profit, as well as cooperation, investment and intellectual property protection opportunities.
Referring to the use of tariff incentives, 17 percent of the surveyed said they enjoyed EVFTA tariff incentives for at least one export shipment, while 16 percent said they had an import shipment subject to tariff preferences. Seventy-three of the surveyed said they knew about the incentives through learning about the agreement’s commitments, while 36 percent of the surveyed said they got information from their partners. Thirty-four percent of the surveyed said their raw material supply and production have met the EVFTA’s rules of origin, while 13 percent had to change and adjust processes and facilities to enjoy the agreement’s incentives.
In particular, 76 percent of the surveyed businesses said they believe that FTAs will have impacts on their operations in the next three years, with 85 percent expecting positive impacts and only one percent predicting negative ones. Most of them expect the agreement will help improve supply, the number of orders, revenues, profits, value chain participation, and cooperation opportunities.
Seventy-six percent of the surveyed businesses said they believe that FTAs will have impacts on their operations in the next three years.
Source: VN Economic News