Decisive reforms needed for Vietnam to get full EVFTA benefits: WB

Vietnam needs to fill major legal gaps and address key implementation issues to reap the full benefits of the European Union Vietnam Free Trade Agreement (EVFTA), according to a new World Bank report, expected to be ratified by Vietnam’s National Assembly in its May meeting.

decisive reforms needed for vietnam to get full evfta benefits wb
The report, “Deepening International Integration and Implementing the EVFTA”, released on May 19, estimates that by simply enjoying the tariff reduction as agreed, EVFTA could boost Vietnam’s GDP and exports by 2.4% and 12% respectively by 2030, while lifting an additional 100,000-800,000 people out of poverty by 2030. Such benefits are particularly urgent to lock in positive economic gains as the country responds to the COVID-19 pandemic.

The report argues that Vietnam could benefit even more from the next-generation trade deals such as EVFTA and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) if it stimulates a comprehensive agenda of economic and institutional reforms to facilitate compliance with non-tariff agreements.

The report estimates that such reforms would result in a “productivity kick”, increasing GDP by 6.8%, relative to the baseline scenario, by 2030. It highlights the need for Vietnam to increase capacity to handle certain key issues, including rules of origin, animal and plant sanitary standards, and investor-state dispute settlement.

“If Vietnam can act in a decisive manner to close legal and implementation capacity gaps, it can capitalize a trade deal whose direct benefits are estimated to be largest in the country’s history,”saidOusmane Dione, World Bank Country Director for Vietnam.

“With COVID-19 acting as a reset button and EVFTA as an accelerator, now is the perfect time to embrace deeper domestic reforms”, Ousmane noted.

The report cites the rules of origin requirement as one of the key challenges for Vietnam to overcome. Even if a product is produced in Vietnam, EU importers might not determine it as such due to the high dependence on imported materials.

The report finds that in key export manufacturing industries, a majority of inputs are sourced from foreign countries (for instance, 62% in electronics and 53% in the automotive sector). It calls for greater efforts to improve linkages between domestic suppliers and foreign enterprises as lead firms in major global value chains.

At the same time, rigorous European food safety standards make it imperative for Vietnam to improve the clarity and consistency of its sanitary measures. By one estimate, the cost of full compliance with existing non-tariff measures in Vietnam will be equivalent to a 16.6% tariff (compared to a regional average of 5.4%).

The introduction of EVFTA is expected to bring more investors into Vietnam both from Europe and the rest of the world. As the flow of foreign investment increase, so does the number of commercial grievances. The report calls for accelerated development of a Systemic Investment Response Mechanism to settle disputes between investors and the state.

The report also makes the case for prioritizing key sectors that make up the bulk of Vietnamese exports to the European market for COVID-19 economic recovery efforts, to maximize the benefits of the trade deal.

Source: VOV
english.vov.vn

Related News

Vietnam and Japan promote cooperation

Vietnam and Japan promote cooperation

VCN - On August 28, Deputy Prime Minister and Minister of Finance Ho Duc Phoc had a working session with the Japanese Senate delegation led by Mr. Nakanishi Yusuke, Senator of the Liberal Democratic Party.
Close cooperation between Vietnam and the EU in sustainable development

Close cooperation between Vietnam and the EU in sustainable development

VCN - EuroCham will closely collaborate and share experiences with various sectors in Vietnam to promote green economic development and sustainable growth.
Green energy goals still face many challenges

Green energy goals still face many challenges

VCN - Green development, energy transition, and emission reduction are inevitable trends that Vietnam cannot stand aside. This is also an opportunity to develop and restructure the economy towards green, clean, and sustainable. However, green energy transition in Vietnam still faces many challenges. Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competitiveness, shared about this issue.
EVFTA strengthens Vietnam

EVFTA strengthens Vietnam's attractiveness to European investors

VCN - The Vietnam - EU Free Trade Agreement (EVFTA) has been in effect for four years (August 1, 2020). However, the level of benefits received from this new generation FTA is divided and different among businesses.

Latest News

Footwear industry takes bold steps towards green growth

Footwear industry takes bold steps towards green growth

Vietnam is discussing the establishment of a centre for raw materials to support the textile, leather and footwear industries, signalling a bold effort for the billion-US-dollar sectors to enhance sustainability and climb higher up the global value chain.
Vietnam likely earn 5 billion USD from rice exports this year

Vietnam likely earn 5 billion USD from rice exports this year

Vietnam’s rice exports are expected to reach a record turnover of about 5 billion USD this year, as high demand from many large and traditional markets, such as the Philippines and Indonesia, continues.
Australian plums to be available in Vietnam

Australian plums to be available in Vietnam

Australian plums will soon be on shelves in Vietnam under the two-way agricultural market access agreement between the two countries that brings Australian plums to Vietnam and Vietnamese passion fruit to Australia, according to the Australian Government.
How to quarantine imported aquatic products for domestic consumption?

How to quarantine imported aquatic products for domestic consumption?

VCN - Enterprises importing aquatic raw materials for export production or export processing for domestic consumption encounter difficulties in implementing quarantine.

More News

Vietnam trade mission in Germany seeks cooperation in automobile industry

Vietnam trade mission in Germany seeks cooperation in automobile industry

The Vietnam trade mission in Germany coordinated with the Berlin – Brandenburg automotive association (aBB) and authorities of the Vietnamese province of Nam Dinh to hold a roundtable on cooperation in the automobile industry.
New markets help fruit exports grow to record revenues

New markets help fruit exports grow to record revenues

Vietnam's fruit export revenue hit 4.63 billion USD in the first eight months of 2024, representing an increase of 30.6% compared to the same period last year, thanks to the opening of several key markets.
Vietnam aims for green, sustainable tourism

Vietnam aims for green, sustainable tourism

VCN - Green tourism is increasingly gaining attention and becoming an important development direction for many countries, including Vietnam. Green tourism will be an important lever for developing a green economy, helping green growth, towards the goal of achieving Net Zero (net zero emissions) by 2050.
Enhancing the role of localities in developing supporting industries

Enhancing the role of localities in developing supporting industries

VCN - Some localities with great potential for developing supporting industries have proactively issued their own policies to support businesses in training human resources, helping businesses access the global production chain.
Mekong Delta promotes clean agricultural production to achieve Net Zero

Mekong Delta promotes clean agricultural production to achieve Net Zero

Localities in the Mekong Delta region have been progressively developing roadmaps for clean agricultural production as an effort to gradually guide Vietnam's agricultural sector towards the goal of "Net Zero" by 2050.
Wood export target of 15.2 billion USD feasible, challenges remain

Wood export target of 15.2 billion USD feasible, challenges remain

Despite market recovery, the wood industry needs to overcome formidable challenges to realise the export revenue target of 15.2 billion USD for the whole year, according to insiders.
Serious shortage and many impacts on seaport human resources

Serious shortage and many impacts on seaport human resources

VCN - According to the assessment of seaport enterprises in Vietnam, from 2024-2028, human resources at seaports will have strong changes in demand, due to the impact of technological trends to meet the task of developing the seaport economy in Vietnam.
Exports gain momentum

Exports gain momentum

VCN - With a highly open economy like Vietnam, exports are an important driving force for economic growth. In many major markets, the recovery in year-end consumption of goods creates more room for industries to contribute to export turnover.
The driving force for businesses to "sprint" at the end of the year

The driving force for businesses to "sprint" at the end of the year

VCN - Although the economy has shown many signs of recovery and business results are positive, the difficult period has not yet passed, forcing businesses to continue to make efforts to "sprint" in the last months of 2024.
Read More

Your care

Latest Most read
Footwear industry takes bold steps towards green growth

Footwear industry takes bold steps towards green growth

Vietnam is discussing the establishment of a centre for raw materials to support the textile, leather and footwear industries, signalling a bold effort for the billion-US-dollar sectors to enhance sustainability and climb higher up the global value chain.
Vietnam likely earn 5 billion USD from rice exports this year

Vietnam likely earn 5 billion USD from rice exports this year

Vietnam’s rice exports are expected to reach a record turnover of about 5 billion USD this year, as high demand from many large and traditional markets, such as the Philippines and Indonesia, continues.
Australian plums to be available in Vietnam

Australian plums to be available in Vietnam

Australian plums will soon be on shelves in Vietnam under the two-way agricultural market access agreement between the two countries that brings Australian plums to Vietnam and Vietnamese passion fruit to Australia, according to the Australian Government.
How to quarantine imported aquatic products for domestic consumption?

How to quarantine imported aquatic products for domestic consumption?

VCN - At the same time, ensuring state management of imported aquatic products for processing and export to change the purpose of domestic consumption food.
Vietnam trade mission in Germany seeks cooperation in automobile industry

Vietnam trade mission in Germany seeks cooperation in automobile industry

The Vietnam trade mission in Germany coordinated with the Berlin – Brandenburg automotive association (aBB) and authorities of the Vietnamese province of Nam Dinh to hold a roundtable on cooperation in the automobile industry.
Mobile Version