On June 8, the Vietnam National Assembly approved a free trade agreement with the EU that is expected to help make the country a new investment destination for producers looking to leave China. The EU-Vietnam Free Trade Agreement (EVFTA) has already been ratified by the EU, making Vietnam the second south-east Asian nation after Singapore to have such a trade deal with the European bloc. For Vietnamese businesses, goods , and services the EVFTA creates competitive pressure on EU goods and services.
Once the agreement takes effect, 71 per cent of exports from Vietnam to the EU will become duty-free, as will 65 per cent of EU shipments to Vietnam. Of the remaining tariffs, up to 99 per cent will be phased out by Hanoi over 10 years and by Brussels over seven years. The trade agreement is projected to make the bloc a bigger purchaser of Vietnamese goods, rising to 15 per cent from its current share. Particularly strong growth in clothing and footwear is expected, accounting for about 20% of Vietnam ‘s exports.
