The signing of the EU - Vietnam Free Trade Agreement (EVFTA) is a huge boost for Vietnam's exports as it helps diversify markets and export items, especially those that Vietnam apparently has many competitive edges. For businesses that have never approached this market, EVFTA is an opportunity for them to reach the EU market, a vast market with highly reliable partners.

Vietnam and the EU have officially signed the EVFTA, wrapping a negotiation process starting from December 2015. Vietnam is a major EU trading partner in ASEAN. The EU’s key imports from Vietnam include ICT devices, footwear, apparels, furniture and agricultural products. Meanwhile, its main exports to Vietnam are machinery, transport equipment, chemicals, foods and beverages. EVFTA is expected to generate robust boosts to export growth, market and product diversity for Vietnam.

At the recent workshop on “European Market after EVFTA: Business Opportunities & Investment Trends for the Future” held by the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi, Mr. Hoang Quang Phong, Vice President of VCCI, affirmed that import and export structures of Vietnam and the EU are complementary, less directly competitive. EVFTA is a comprehensive agreement covering all trade, tax and technical barriers, ensuring interests of all parties, and opening up many opportunities for Vietnamese businesses. The pact is believed to open a new horizon of broad, comprehensive and strong cooperation for Vietnam and the EU, meet the needs of the people and businesses of both sides and create many incentives for exports of the two sides.

According to Ms. Hoang Ngoc Oanh, Representative of the Industry and Trade Information Center under the Ministry of Industry and Trade, EVFTA creates business opportunities, including opportunities for the economy, opportunities for economic sectors, and opportunities with Vietnamese businesses. Following the enforcement of EVFTA, Vietnam's exports to the EU will increase by 20% in 2020, 42.7% in 2025 and 44.37% in 2030. Accordingly, its GDP will also increase from 2.18-3.25% in 2019-2023 to 7.07-7.72% in 2029-2033. Export-driven manufacturing will grow strongly in the coming time, including foodstuffs (especially seafood), rice, vegetables, fruits, nuts, electronics, machinery and equipment, aviation, expertise, telecommunications and shipping services.

She said, given EVFTA commitments such as eliminating tariffs, reducing nontariff barriers, improving business environment, facilitating trade, strengthening mutual recognition of standards and promoting investment, some sectors such as garment and textile, food processing, and automobile will have the opportunity to join global value chains.

Besides, as a new generation agreement, EVFTA includes provisions on intellectual property protection, investment freedom and sustainable development. In parallel with EVFTA, commitments to fairness, equality, security and protection of each other's investments and investors in the EU - Vietnam Investment Protection Agreement (EVIPA) will also help create a transparent legal and investment environment, there uplifting Vietnam - EU investment relations significantly.

As for opportunities for businesses to invest in the European market in general and Cyprus in particular, Ms. Hoang Ngoc Oanh stressed that there will be many opportunities for Vietnamese businesses. Located in a strategic position - the intersection of the three continents of Asia, Europe and Africa, Cyprus is the investment gateway to the European Union and the Middle East. This is one of the most developed countries in the Mediterranean region and runs a free market economy.

She added that Cyprus is an attractive investment destination as it has highly qualified human resources, a reliable legal framework, a stable tax system, high security and current steadiness. The Cyprus Investment Program (CIP) has proven to be very popular among businesspeople and the wealthy worldwide.

However, Vietnam will also face significant challenges. The EU market is a relatively high standard market which imposes very strict requirements for merchandise quality, environmental standards, origin and intellectual property. Technical measures and barriers are always challenging for Vietnamese exporters.

VCCI Vice President Hoang Quang Phong said, it is important for businesses to have a more inclusive vision, have more active access to information about new markets. At the same time, it is necessary for them to position themselves on the market in the context of integration, restructure management and upgrade technology to meet requirements on rules of origin and technical barriers and establish a risk hedging system.

Source: VCCI

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