The agreement entered into force when the Covid-19 pandemic disrupted global trade. In terms of value, the first seven months of the EVFTA (August 2020-February 2021) recorded the weakest commercial performance in the last five years over the same period. In particular, the value of EU exports to Vietnam fell by 10%. However, this increase is not necessarily associated with EVFTA. For example, EU exports to Vietnam in the field of electronic machinery (HS code 85) increased by 50% in value and 25% in volume seven months after the entry into force of the EVFTA. However, the correlation with the agreement is limited because the products whose exports have increased the most in this category, namely power generation modules (HS code 8502) and electrical accumulators (HS code 8507), were already duty-free before the EVFTA [2]. This increase could therefore be more related to the recovery of the economy in the second half of 2020. The European Union and Vietnam signed a trade agreement and an investment protection agreement on June 30, 2019. . The European Parliament then gave its consent to both agreements on 12 February 2020, and the free trade agreement was concluded by the Council on 30 March 2020. Although trade statistics between the EU and Vietnam have not given the most optimistic terms over the past seven months, there are certainly better prospects, especially given the economic recovery expected in 2021. In order to benefit from preferential customs duties under the EUSFTA, economic operators must comply with the general rules of origin of the Agreement or with the product-specific rules of origin and with a State-issued certificate of origin issued by a certified exporter (Form EUR.1) or an origin declaration issued by a certified exporter (i.e. Self-certification of origin).

THE CEFTA provides for bilateral cumulation of origin, under which goods manufactured in one Party and containing materials of the other Party may benefit from preferential treatment. It also allows for limited cumulation of South Korean substances used in textile production and the possibility of cumulating fishing materials from other ASEAN Member States. Recent changes in the EU, in particular Brexit, could have an impact on the outcome and importance of the EVFTA. For now, the UK`s free trade agreement will enter into force by the end of the year and could be extended for another 24 months as part of the UK`s deal with the EU. As the most ambitious free trade agreement ever signed by the EU with a developing country, the EU-Vietnam Free Trade Agreement (EVFTA) will collectively eliminate 99% of tariffs within ten years [1]. It is time to look at its impact and see if there are already observable results for EU-Vietnam TRADE and, more importantly, assess what we can expect given the global economic recovery forecast for 2021. Vietnam and the EU have set a timetable in which they have committed to liberalise all tariffs. These commitments include a seven-year deadline for Vietnamese textile and footwear products. The sector`s exports reached about $9 billion in 2018. Since a large part of Vietnam`s exports to the EU are consumer goods such as clothing, textiles and footwear, the free trade agreement could significantly increase their trade volume.

CEFTA obliges Vietnam and the EU (if it has not already been done) to (i) ratify the eight core Conventions of the International Labour Organization (ILO); (ii) Respect, promote and effectively implement ILO principles on fundamental rights in the workplace; and (iii) the implementation of the Paris Agreement and other international environmental agreements, including the promotion of the conservation and sustainable management of wildlife, biodiversity, forestry and fisheries. This will involve an independent civil society in monitoring the implementation of these commitments by both parties. Vietnam has already taken some steps to comply with its commitments, including ratifying ILO Convention 98 on Collective Bargaining in June 2019, adopting a revised labour law in November 2019, and adopting a resolution allowing Vietnam to accede to ILO Convention 105 on the Abolition of Forced Labour in June 2020. Analysts hope the trade deal will give Vietnamese industries, such as manufacturing, a much-needed boost as it seeks to recover from the COVID-19 pandemic. The bilateral trade and investment agreements with Vietnam concluded by the EU in March 2020 and the trade agreement are expected to enter into force during the summer after their final ratification by Vietnam. The agreements with Vietnam are the second (after those with Singapore) between the EU and a Southeast Asian country and represent a springboard for increased engagement between the EU and the region. According to the EU`s preliminary economic forecasts, EU trade with non-EU countries is expected to grow exports by 6.5% and imports by 7.5% in 2021. Given that most vietnamese export products in the EU-Vietnam are consumer goods, the gradual warming of retail demand, coupled with the economic recovery, is leading to growth in imports from Vietnam (Figure 5).

Tariffs on the majority of consumer goods produced in Vietnam and destined for Europe will only be gradually liberalised in three to seven years. However, the removal of non-tariff barriers, such as simplifying vietnam`s customs clearance process, will improve trade and facilitate maritime transport. The EVFTA is seen as a model for the EU to continue to conclude free trade agreements with various ASEAN countries with the ultimate aim of concluding a free trade agreement from one region to another once there is a sufficient critical mass of agreements with the various ASEAN countries. [7] This process could take about 10 to 15 years. Therefore, Vietnam should use this window of opportunity before free trade agreements are concluded with others in the region and enter into force to become a regional center. 1 In 2017, the Court of Justice of the European Union held that certain provisions of the EU-Singapore Free Trade Agreement on foreign direct investment and investor-state dispute settlement (ISDS) did not fall within the exclusive competence of the European Union and needed to be ratified by the national parliaments of the Member States of the European Union. In an effort to remove opposition to the trade deal, the EU and Singapore have therefore agreed to split the deal into two separate agreements. Negotiations between the EU and Vietnam followed the same process. In 2018, the part of the agreement that covers investments was divided into a separate investment protection agreement, EUVIPA.

The national ratification process of the EU-Singapore IPA is still ongoing and is expected to take at least two years. 2 Details are available in Appendix 9-B here. 3 Vietnam was founded on the 5th. December 2012 WTO-GPA Observer. The EU-Vietnam Free Trade Agreement (EVFTA) is a free trade agreement between the European Union (EU) and the Socialist Republic of Vietnam. The EU-Vietnam Investment Protection Agreement (EVIPA) was also concluded, which is a bilateral investment agreement. [1] Almost all tariffs – more than 99% of tariff items – will be eliminated over the next 10 years. The remaining small number are partially liberalized through duty-free quotas. As a developing country, Vietnam liberalized about 65% of the value of EU exports, which corresponds to about half of the tariff items, when it entered into force. The remaining tariffs will be abolished over the next decade. This is an unprecedented and far-reaching tariff abolition for a country like Vietnam, which demonstrates its quest for deeper integration and trade relations with the EU. Vietnam currently benefits from trade preferences with the EU under the Generalised System of Preferences.

Vogue, the verdict on the world`s largest free trade agreement Given that the UK is one of the largest markets for Vietnam`s exports and one of Vietnam`s largest investors, the UK`s trade and investment will likely remain in limbo as long as markets deal with the consequences of Brexit. .