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SURVEY

News & Events / News

EVFTA Commitments Aligning Interests (24/7/2015)

The EU - Vietnam Free Trade Agreement (EVFTA) is a high-quality comprehensive accord as it well balances benefits for both sides and ties in with the provisions of the World Trade Organisation (WTO). EVFTA contents not only specify provisions on trade in goods and services, but also meticulously detail government procurement, intellectual property rights, sustainable development, cooperation and capacity building and legal issues.

Benefits for agriculture, fisheries of Vietnam
For Vietnamese exporters, as soon as the agreement enters into force, the EU will abolish import duties on 85.6 percent of tariff lines, equivalent to 70.3 percent of Vietnam's export turnover to the EU. After seven years from the effective date, the EU will lift 99.2 percent of tariff lines, equivalent to 99.7 percent of Vietnam’s export turnover with this market. As for 0.3 percent of remaining exports, the EU is committed to subject zero tax.

As for important exports like apparels, footwear and seafood (except for canned tuna and fish ball), the EU will completely repeal import taxes on Vietnam’s products within seven years since the effective date of the agreement. As for canned tuna, the EU agreed to provide Vietnam with a reasonable amount of tariff rate quotas.

The EU will offer Vietnam a significant quota for husked rice, unhusked rice and fragrant rice. Rice imported under this quota is totally exempt from import duties. As for broken rice, import duties will be eliminated according to a pre-set roadmap. As for rice-based products, the EU will bring import tariffs to zero within seven years.

The EU will immediately eliminate tariffs on honey, tubers, fruits, processed vegetables, processed tubers, processed fruits, fruit juices, handbags, suitcases, plastic products, glass and ceramic products after the pact takes effect and will not impose tariff rate quotas.

EU commodities imposed tax cuts
Vietnam pledged to bring import duties on automobiles and motorcycles to zero after 9-10 years. Motorcycles with an engine displacement of over 150 cubic centimetres will be exempted from import tariffs in seven years. Vietnam agreed to lift import duties on wine, spirits, beer, pork and chicken within at most 10 years.

Vietnam is committed to eliminating a majority of export duties in a preset roadmap and only reserving export levies on some important products, including crude oil and coal.

Vietnam and the EU also reached a consensus on customs procedures, sanitary and phytosanitary (SPS), technical barriers to trade (TBT), trade remedies and other contents to create a legal framework for both sides to cooperate and facilitate export and import of businesses.

Joint commitments
Commitments of Vietnam and the EU to trade, investment and services are aimed to create an open and favourable investment environment for businesses of both sides. Vietnam's commitments go beyond WTO commitments. EU’s commitments are higher than WTO commitments and equivalent to its highest commitments in recent FTAs.
Vietnam was committed to facilitating EU investors in professional services, financial services, telecommunications services, transportation services and distribution services. Both sides also pledged to apply national treatments to investment and discussed on contents concerning the settlement of disputes between investors and the State.

Vietnam and the EU agreed on contents tantamount to the WTO Agreement on Government Procurement (GPA). With some obligations like bidding online, establishing websites to publish procurement information, Vietnam will have a roadmap for implementation. The EU also pledged to provide technical assistance for Vietnam to implement these obligations.

Intellectual property commitments include copyright, invention, patent, commitments related to pharmaceuticals and geographical indications. Basically, Vietnam’s intellectual property commitments correspond to the current law.

With respect to geographical indications, when the agreement takes effect, Vietnam will protect over 160 EU geographical indications (including 28 EU members) and the EU will guard 39 geographical indications of Vietnam. Vietnam’s geographical indications are related to agriculture and foods.

EVFTA also comprises chapters on competition, State-owned enterprises (SOEs), sustainable development, cooperation and capacity building, legislation and institution. These contents match Vietnam’s legal system, and create a legal framework for the two sides to strengthen cooperation, and promote trade and investment development.

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