New prospects and future opportunities for trade in Vietnam

The EVFTA paves the way for new investment opportunities for European countries and companies

Once again, the COVID-19 pandemic does not hinder moments of dialogue and discussion about new agreements with ASEAN countries. On the 8th of October, the webinar "Vietnam: the new trade agreement with the EU and opportunities for Italian companies" was held, organized by Assolombarda in collaboration with the Italy-ASEAN Association, in light of the entry into force of the Free Trade Agreement between the European Union and Vietnam. 

Indeed, following the experience of the pandemic, it is increasingly clear that international cooperation is now a valid and effective solution for the economic recovery of states. This is the case of the EVFTA, which significantly improves dialogue between the European and Vietnamese institutions. The agreement guarantees a number of opportunities to companies that decide to look towards Vietnam from Europe and that are willing to join new market segments within an area of increasing economic vitality. Actually, the country plans to grow by 2.7% in 2020, preventing the possibility of a recession, unlike many other developing countries that after years of continued growth, instead, will register a negative sign this year. In the context of geopolitical and trade tensions between China and the United States, Vietnam has become the preferred destination of many companies, including Chinese ones, which in doing so are able to sidestep Washington’s tariffs. 

Specifically, the new legislation over customs offers Vietnam consistent tariff concessions compared to other agreements. In this regard, the Director of the Vietnam Chamber of Commerce and Industry (VCCI), Thu Trang Nguyen, highlighted the advantages of the commercial arrangement compared to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP). The European Union has eliminated 85.5% of tariff lines towards Vietnam compared to 78%-95% guaranteed by the CPTPP. At this rate, by 2027, almost all products of Vietnamese origin exported to the EU will be taxed at 0%, with the exception of the so-called "sensitive goods", such as food and tobacco. These are ambitious trade targets for the EU and Vietnam, unlike the CPTTP, which takes about 10 years to generate the same effects. The agreement includes technical rules regarding the new customs norms and introduces tools that guarantee the fluidity of trade through the valorization of economic integration and the promotion of sustainability and the circular economy.

In tal senso, il Paese sta facendo passi da gigante nel settore energetico, potenziando e incentivando l’uso delle fonti di energia rinnovabile, come ad esempio le cosiddette “solar farms” che provvedono a soddisfare le esigenze energetiche garantendo un impatto minimo sull’ambiente. Il Vietnam intende, infatti, rilanciarsi da subito su questo fronte mirando ad un aumento della percentuale di energia solare ed eolica dal 10% attuale al 15%-20% entro il 2030 e al 25%-30% entro il 2045.

Si tratta di elementi che fanno ben sperare circa il futuro del Vietnam. Il Paese presenta ad oggi grandi potenzialità sulla scena economica internazionale e l’accordo pone finalmente le basi per una sempre migliore cooperazione bilaterale. L’EVFTA procede quindi in linea con gli altri accordi conclusi dalla UE negli ultimi anni e dovrebbe favorire la rapida ripresa economica del Vietnam, rendendolo una delle mete favorite per gli investimenti esteri e per il commercio di beni e servizi. Ad oggi, la crisi innestata dalla pandemia continua a porci di fronte ad un futuro incerto ed offuscato ma, attraverso accordi commerciali di questo calibro e migliorando la cooperazione internazionale, la ripresa potrà essere rapida e sostenibile.

By Hania Hashim