This Monday, the National Assembly of Vietnam ratified a free trade agreement with the European Union (EU), which over the next 10 years will cut or eliminate 99 per cent of tariffs on trade between the two sides. Lawmakers of the Vietnamese Parliament approved the Europe-Vietnam Free Trade Agreement (EVFTA), which will come into effect in July having also secured the approval of the European Parliament in February.
When it comes into effect, 71 per cent of Vietnamese exports to the EU will be exempt of tariffs while taxes on the remaining goods will be lifted in the next seven years. In return, Vietnam will lift 65 per cent of the tariffs on products from EU member countries, while taxes on the remaining goods will be reduced over the next 10 years until 99 per cent of them are eliminated.
Export without tariffs of sensitive Vietnamese agricultural products, such as rice, garlic and eggs, will be limited.
The EU is Vietnam''s second largest export destination behind the US, and is also the second largest exporter of goods to the Southeast Asian country, also behind the US. According to a recent report by the World Bank, the agreement will allow Vietnam to boost its GDP by 2.4 per cent over the next decade thanks to a sharp 12-per cent rise in exports and will help lift tens of thousands of people out of poverty.