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The UEB has announced the one-year evaluation report on the implementation of the EVFTA

Update at 10:45, Monday, 20/12/2021 (GMT+7)

Mr. Pham Van Long represented the research team to present the Report

After 10 years of negotiation, the Free Trade Agreement between Vietnam and the European Union (EVFTA) officially took effect in August 2020 in a special context, when the whole world is struggling with COVID-19 pandemic.

With strong commitments in opening the goods market, the EVFTA is expected to be a boost to Vietnam's economic growth; helping to diversify markets and boost exports, especially for commodities where Vietnam has many competitive advantages such as agriculture and fishery. The EU-Vietnam Free Trade Agreement (EVFTA) after 1 year of implementation, besides the obvious results, has also suggested to regulators and businesses many issues that need attention, especially challenges.

On November 3, 2021, in Hanoi, the Institute for Economic and Policy Research (VEPR), under the VNU University of Economics and Business in collaboration with the Konrad Institute - Adenauer Stiftung (KAS) in Vietnam organized the workshop “One Year Implementation of EVFTA- Impacts on Vietnamese Economy and Policy Formation.”

Mr. Pham Van Long represented the VEPR research team to report that, in the context of the unprecedented outbreak of the Covid-19 epidemic globally, trade between Vietnam and the EU still has witnessed certain improvements after one year since the EVFTA took effect. While the value of Vietnam's key export products to the EU market such as phones components, textiles and garments all decreased, Vietnam's export turnover to the EU market still increased by 6.2% compared to the same period last year, reaching 39.75 billion USD. This growth is thanks to the recovery of the EU economy in the second quarter of 2021. At the same time, the impact of tariff reductions on Vietnamese products entering the EU market helps promote exports of items benefiting from the EVFTA. Some industries are exempted from almost all import tax rates into the EU market with strong growth, such as iron and steel products and products from plastic or rubber. Particularly for iron and steel products, in addition to benefiting from the tax rate reduction with the increase in the price of raw iron, the price of finished steel nearly doubled in the past year, also causing the export turnover of this item to skyrocket. Total import turnover of Vietnam's goods from the EU market reached 16.51 billion USD, up more than 24% over the same period last year. In which, Vietnam imports the most goods from Ireland (mainly computers and electronic products).

Assoc.Prof.Dr. Nguyen Anh Thu opened the workshop

The Vietnamese legal system is gradually changing positively to meet the requirements of the EVFTA. However, notable areas that need further reform are included intellectual property, worker rights, and environmental protection. In the context that the whole world is struggling with the Covid-19 pandemic, the supply chain is interrupted due to the countries’ closure to prevent the penetration of the virus. Trade between Vietnam and the EU still has a certain improvement when import and export turnover between the two sides still grows over the same period in 2020. However, as a general trend, the negative impact of Covid-19 also affected the cooperation between the two sides when FDI flows from the EU to Vietnam dropped sharply in the period from August 2020 to August 2021. Agricultural, forestry, and fishery products and products exported to the EU account for a high proportion of the total export turnover. However, these items are facing many risks because they often violate SPS regulations from partners. For Vietnam's key export products, the value added in the production of domestically created products is still low. Therefore, it is difficult for these products to fully take advantage of the benefits of tariff reduction or exemption when they do not meet the requirements in the origin inspection processes. Vietnam's trade costs are higher than that of other ASEAN countries. Non-tariff measures and administrative procedures are still complicated and hinder foreign investors as well as the import of goods from abroad, thereby reducing Vietnam's competitiveness compared to other countries. water in the same area.

The seminar attracted the participation of experts, the business community of Vietnam, the EU, the German embassy in Vietnam as well as the media. In addition to the participation of Assoc. Dr. Nguyen Anh Thu, Director of VEPR of the VNU-UEB, Ms. Pham To Hang, Program Manager, KAS Institute in Vietnam, the workshop also had the participation of and discussion by Mr. Jean-Jacques Bouflet, Vice President, European Chamber of Commerce in Vietnam (Euro charm), Dr. Le Dang Doanh, senior economist, Dr. Le Quoc Phuong, Former Deputy Director of Industry and Trade Information Center, Ministry of Industry and Trade, and Dr. Vu Thanh Huong, Vice Dean of Faculty of Economics and International Business, UEB.

Dr. Vu Thanh Huong discussed the report results

Experts highly appreciated and agreed with the statements from the VEPR report, and discussed issues surrounding the impact of the EVFTA, the problems posed to businesses, the Government of Vietnam and proposed a solution number of policy implications. Experts especially emphasized that the EVFTA has opened up special opportunities and advantages for promoting trade between the EU and Vietnam while only a few Asian countries have this advantage. However, to be able to take advantage of opportunities from this Agreement, it is necessary to have specific support programs for Vietnamese enterprises from information and digital transformation to cooperation and deeper participation in the value chain global rule. It is necessary to reform and increase the management and supervision capacity of SPS Vietnam to limit violations of regulations on food safety and animal and plant quarantine to importing countries. Policy commitments related to intellectual property, labor, and information transparency need to be prioritized, especially Vietnam needs to step up reforms and implement policies related to intellectual property to develop trade in services as well as develop new forms of trade. In the long term, it is necessary to have programs to support training and improve the quality of human resources in order to improve the competitiveness of domestic enterprises.

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RELATED INFORMATION:

1. Vietnam News Agency

https://bnews.vn/cong-bo-bao-cao-danh-gia-mot-n…/219632.html

2. Industry and Trade Newspaper

https://congthuong.vn/1-nam-thuc-thi-hiep-dinh-evfta-viet-n…

3. Da Nang Department of Foreign Affairs

https://fad.danang.gov.vn/web/guest/chi-tiet?id=3433&_c=59

4. Electronic newspaper of the Communist Party of Vietnam

https://dangcongsan.vn/…/evfta-hiep-dinh-the-he-moi-huong-t…

5. Liberation of Saigon