Eu-Vietnam Free Trade Agreement (Evfta)

To qualify for preferential tariffs under the EUSF, operators must comply with general rules of origin or rules of origin specific to the products of the agreement and complete a certificate of origin (eur.1) issued by the government or a declaration of origin from a certified exporter (i.e. self-certification of origin). The TFUE allows for the bilateral accumulation of origin, in which products manufactured in one part can benefit from preferential treatment and containing materials of the other party. It also allows for a limited accumulation of South Korean substances used in textile manufacturing and the possibility of accumulating fishing equipment from other ASEAN Member States. The free trade agreement focuses on duty-free trade. It provides for the total abolition of almost all tariffs, with the exception of certain tariff quotas subject to duty-free tariff quotas. When products originating in the EU are imported into Vietnam, machinery, pharmaceuticals, chemicals, textiles and fisheries (salmon, halibut, trout and homer) benefit from the immediate abolition of tariffs. Tariffs on auto parts, motorcycles, frozen pork, food preparations, wines and spirits are abolished over a 7-year period; Tariffs on cars, chickens and beer are abolished over a 10-year period. Vietnam will maintain the Existing World Trade Organization tariff quotas for refined sugar, salt and eggs, albeit with a reduction of the quota to zero on a 10-year value. The agreements must now be ratified by the Vietnamese National Assembly and EU member states in the case of the Investment Protection Agreement. With regard to intellectual property rights, Vietnam is committed to achieving a high level of protection that goes beyond the standards of the WTO TRIPS agreement.

This agreement better protects innovation, artwork and trademarks in the EU from illegal copying, including through stricter enforcement rules. The trade agreement will also open up new opportunities for businesses wishing to develop commercially by improving market access in the service sectors and in many non-market sectors, such as manufacturing. This means new opportunities to attract investment, for example for industrial production. Vietnam currently enjoys trade preferences with the EU under the generalised preference system. Similarly, almost 100% of Vietnam`s exports to the EU will be eliminated after ten years. So far, this is the highest commitment a partner has given to Vietnam in a trade agreement. This is particularly important when the EU has been one of the country`s two main export markets. This agreement includes many provisions that contribute to the convergence of Vietnamese standards with those of the EU.

The importance of the Vietnamese market will only increase if elements of the ALEC are implemented and the corresponding non-tariff barriers are removed. The legal text of the TUEA contains a series of joint declarations and agreements which, in accordance with Article 17.21, are an integral part of the agreement. The bank capital agreement requires the Vietnamese authorities to examine the investments of EU financial institutions at “cheap” in order to hold up to 49% of the chartered capital in two Vietnamese equity banks within five years of the entry into force of THE TUEFTA. There is a special body to exclude four commercial banks, the Investment and Development Bank of Vietnam (BIDV), Vietinbank, Vietcombank and Agribank, of which the Vietnamese government is currently the majority shareholder.