News & Trends – EVFTA
EU-Vietnam Free Trade Agreement (EVFTA) enters into force
The Free Trade Agreement (EVFTA) between the European Union and Vietnam is in force since 1 August 2020. It aims to simplify imports and exports for EU companies from and to Vietnam. For Vietnam itself, this creates the opportunity to be more closely linked to European trade and to develop important markets. The new FTA has thus laid the foundations for better economic relations to bring the EU and Vietnam closer together economically.
One of the most important criteria is to increase Vietnam’s economic strength. For this reason, around 65 percent of the previous free trade tariffs are to be completely eliminated, allowing the EU to export more to Vietnam. The remaining 35 percent of customs duties will be dismantled over the next ten years, including, for example, wine, beef or car parts.
The free trade agreement is also worthwhile for the Vietnamese side. 71 percent of all import duties on Vietnamese goods will be dismantled immediately. After another seven years, 99 percent of customs duties are to be abolished to strengthen the economy on both sides. This will lead to a noticeable increase in Vietnamese exports to the EU.
At this stage, free trade between the EU and Vietnam is a sign of improved international economic relations. This cooperation is designed to protect the rights of individual actors in both environments through the recognition of mutual standards. This also provides more comfort and less danger for local workers in their daily lives, so that they can carry out their work properly and fairly.
Changes for import and export
The Agreement includes Protocol 1 – on the definition of the concept of „originating products“ and methods of administrative cooperation. The Protocol sets out the conditions under which goods acquire preferential origin in the EU or Vietnam, and thus, under the Agreement, entitlement to preferential treatment in the country of importation. The conditions for sufficient treatment of non-originating materials are set out in Annexes I and II to the Protocol. The Protocol further regulates the method of proving the preferential origin of goods.
When importing into the EU: Certificate of origin EUR. 1 or declaration of origin for consignments of a value not exceeding EUR 6000. The declaration of origin must be signed by the exporter.
When exporting from the EU: Declaration of origin made out by a registered exporter (REX) which does not need to be signed by the exporter, or any declaration made by any exporter in respect of consignments the total value of which does not exceed EUR 6000, to be signed by the exporter.
A declaration of origin may be made out on an invoice, delivery note or other commercial document describing the products concerned in sufficient detail to enable them to be identified. The language versions of the declarations of origin are set out in Annex VI to the Protocol.
Closer trade relations through the investment protection agreement
The FTA is expected to significantly improve relations around the Vietnamese economy. This was already apparent before the new treaties came into force, as the investment protection agreement aims to reduce bureaucracy and effort as smoothly as possible. For this reason, free trade is one of the EU’s flagship projects to promote justice worldwide and also improve the economic situation.
Part of the ratification process for the new free trade was also that the improvements in trade are also linked to an improvement in the social situation. If possible, this should be initiated before the entry into force, so that the improvement of the situation can be considered step by step. In this way, trade and change will be linked in such a way that the Vietnamese economy can benefit from more exports and at the same time have access to European products and goods.
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