EVFTA could turn Vietnam into new destination for manufacturers: Nikkei

Business publication Nikkei Asian Review of Japan has recently released an article, affirming the Vietnam National Assembly’s ratification of the European Union-Vietnam Free Trade Agreement (EVFTA) is expected to transform Vietnam into a fresh investment destination for manufacturers looking for alternatives to China.
evfta could turn vietnam into new destination for manufacturers nikkei

EVFTA could transform Vietnam into a new investment destination for manufacturers, according to Nikkei Asian Review

The article reports that by ratifying the EVFTA Vietnam is the second country in Southeast Asia to enjoy a trade deal with the European bloc, alongside Singapore.

Once the agreement comes into force scheduled for August 2020, a total of 71% of exports from the country to the EU will become duty-free, so will 65% of EU shipments to Vietnam. Furthermore, up to 99% of tariffs will be phased out by Hanoi over the course of the subsequent 10 years, and by Brussels over the next seven years.

With a population of approximately 96 million, Vietnam boasts the third-largest population among the 10-member Association of Southeast Asian Nations. Moreover, its per capita GDP is estimated to be roughly US$3,500 for 2019, topping the $3,000 benchmark that usually sees car and appliance ownerships take off.

The article points out that Hanoi already enjoys plenty of benefits from the EU's preferential tariff scheme, adding that the trade deal will surely make the bloc a bigger buyer of Vietnamese goods, therefore increasing its current share of some 15%.

According to the article, strong growth is anticipated for the apparel and footwear sector, which accounts for roughly 20% of all Vietnamese exports with the country emerging as the world's third-largest apparel exporter following China and Bangladesh.

In addition, local textile companies are gearing up to enter the EU market. Once the deal comes into full effect, the bloc will eliminate tariffs on 77.3% of all textile and apparel exports from Vietnam over the course of the subsequent five years, while removing the remaining 22.7% in the following seven-year period.

Most notably, many local companies operating in the sector claim that their contracts with partners in the EU and the United States have been canceled, delayed, or scaled down in recent months. Indeed, the country’s garment industry reported that all enterprises have been affected by the pandemic, noting that 70% of the members were urged to cut labour force in March, with greater reductions in April and May.

Hopes are therefore growing that the trade deal will provide a much-needed boost to the national economy, which is certain to suffer a slowdown from the 7% growth experienced before the novel coronavirus pandemic. Due to the current global COVID-19 crisis, this year’s target in terms of garment export turnover is US$34 billion, down from US$39 billion last year.

The article emphasises that the EVFTA represents positive news for multinational manufacturers outside of the EU as well. Among Japanese enterprises, apparel companies such as Uniqlo operator Fast Retailing and automakers are seeking to increase shipments from Vietnam to Europe.

The Japanese news publication quotes data from the Vietnamese Government, as saying Hanoi's exports to the EU market reached US$42 billion in 2019, while the bloc's shipments to the country totaled US$15 billion. It says there are high hopes from the Vietnamese side on what benefits the agreement can bring.

The Ministry of Planning and Investment therefore expects national export revenue to the EU to enjoy a rise of 42.7% by 2025, in addition to a boost of 44.37% by 2030 in comparison with the no-deal scenario.

The World Bank projects that the agreement will help to boost Vietnam's GDP by 2.4% and increase exports by 12% by 2030. Tran Tuan Anh, Vietnam’s Minister of Industry and Trade, has said the agreement will speed up the reduction of poverty nationwide.

Most notably, the UK, which is completing the Brexit process, will remain part of the EU trade pact with Vietnam until the end of 2020. UK ambassador to Vietnam Gareth Ward told British companies in a recent online conference that both the UK and Vietnam are working on a bilateral trade deal, with an agreement expected to be reached by the end of the year.

In addition, the country is also part of a free trade partnership known as the Regional Comprehensive Economic Partnership (RCEP), which includes all of Southeast Asia, as well as Australia, China, India, Japan, New Zealand, and the Republic of Korea. Elsewhere, the nation is also seeking a trade deal with Israel, whilst local companies are urging it to begin negotiating an FTA with the US as soon as possible.

Source: VOV
english.vov.vn

Related News

Bright spots at the beginning of the year

Bright spots at the beginning of the year

VCN - Production and business activities of enterprises have been vibrant since the first days of the year, thanks to which, many economic indicators in the first 2 months of 2024 are positive and positive. This is the fulcrum of trust and motivation for businesses to continue to develop.
Vietnam experiences a trade surplus of over US$11 billion in two months

Vietnam experiences a trade surplus of over US$11 billion in two months

VCN - The trade turnover between Vietnam and China reach over US$27 billion only in two months
The Minister of Finance chaired the Vietnam - Korea Financial Investment Promotion Conference

The Minister of Finance chaired the Vietnam - Korea Financial Investment Promotion Conference

On March 7, in Seoul Capital, South Korea, the State Securities Commission (SSC) organized a financial investment promotion conference with the theme "Vietnam - Investment destination". Minister of Finance Ho Duc Phoc attended and chaired the Conference.
Hundreds of billions of dong are collected from exporting one type of drink every month

Hundreds of billions of dong are collected from exporting one type of drink every month

VCN - In less than two months, tea exports earned nearly US$24.2 million (equivalent to about VND600 billion), a sharp increase compared to the same period last year.

Latest News

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN member states and the Republic of Korea (RoK) have reached a consensus on the transposition of ASEAN-RoK Free Trade Agreement (AKFTA) Product Specific Rules from the Harmonised System Codes HS 2017 to HS 2022.
Opportunities for digital technology businesses to go global

Opportunities for digital technology businesses to go global

Finding solutions and directions to promote and develop Vietnamese digital technology enterprises is an important task, which will promote the stability and sustainability of the country's economy, heard a recent conference.
Vietnam, China eye stronger border trade

Vietnam, China eye stronger border trade

Border provinces of Vietnam and China should continue close coordination and enhance trade promotion between the two sides, stressed the recent talks between the management boards of the economic zone of the northern province of Ha Giang and the Malypo border economic cooperation zone of China’s Yunnan province.
Improve competitiveness and sustainable development of the seafood industry

Improve competitiveness and sustainable development of the seafood industry

VCN - In early 2024, seafood exports have prospered. This is the driving force that helps seafood businesses hope for a stronger recovery this year. Ms. Nguyen Thi Thu Sac, Chairwoman of the Vietnam Association of Seafood Exporters and Producers (VASEP) shared with Customs Magazine.

More News

Business environment reform needs further promotion: expert

Business environment reform needs further promotion: expert

Resolution 02 issued by the Government creates pressure for the ministries, sectors and localities to make changes for the business community as well as the socio-economic development.
Singapore is the largest foreign investor in VN in Q1

Singapore is the largest foreign investor in VN in Q1

The disbursed FDI rose by 7.1 per cent in the first quarter to reach $4.63 billion, a signal that the disbursement will continue the positive trend, the agency said.
Thai Binh boosts investment, trade cooperation with Germany

Thai Binh boosts investment, trade cooperation with Germany

A delegation from the northern province of Thai Binh, led by Deputy Secretary of the provincial Party Committee Nguyen Khac Than, visited several localities and business organisations in Germany from March 25 to 27, in a bid to enhance trade cooperation with and attract direct investment from the European nation.
Lifting obstacles to develop industrial parks

Lifting obstacles to develop industrial parks

VCN - Attracting investment and developing industrial zones (IZs) and economic zones (EZs) is one of the important contents to implement the policy of developing a multi-component, open, attract investment and resources from all economic sectors to develop the country. In addition to the results achieved, there still limitations that need to be removed to draw investments to develop industrial parks and economic zones, including financial problems for industrial parks.
Unlock capital flows and create favorable conditions for investors

Unlock capital flows and create favorable conditions for investors

VCN - Talking with the press, Dr. Ngo Cong Thanh (Photo), Provisional Executive Committee member of the Vietnam Industrial Park Finance Association (VIPFA), said that it is necessary to open up capital flows and create conditions for investors to access key factors. Facilitate production and business factors and innovate investment promotion activities to more effectively develop industrial parks.
More than 300 businesses, manufacturers to attend VGMF 2024

More than 300 businesses, manufacturers to attend VGMF 2024

More than 300 domestic and foreign businesses and manufacturers will attend the Vietnam Global Manufacturing Forum 2024 (VGMF2024) to explore investment and business cooperation opportunities.
Connecting with FDI firms helps boost wood exports: insiders

Connecting with FDI firms helps boost wood exports: insiders

Strengthening linkages and cooperation between foreign-invested and domestic enterprises will contribute to promoting the sustainable development of the Vietnamese wood industry, according to insiders.
Doosan Vina exports nearly 2,000 tonnes of modules to US

Doosan Vina exports nearly 2,000 tonnes of modules to US

The Doosan Enerbility Vietnam (Doosan Vina) specialising in heavy industries announced on March 26 that it has just exported a batch of nine modules weighing nearly 2,000 tonnes to the Golden Triangle Polymers company in Texas, the US.
Wood processing enterprises strive to increase the proportion of individually designed goods

Wood processing enterprises strive to increase the proportion of individually designed goods

VCN - Many wood and furniture processing enterprises are promoting investment in design activities, helping to increase the proportion of individually designed products (ODM) in exports, thereby affirming the industry's capacity Vietnamese wood in segments with higher added value.
Read More

Your care

Latest Most read
ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN, RoK agree on transposition of AKFTA product specific rules

ASEAN member states and the Republic of Korea (RoK) have reached a consensus on the transposition of ASEAN-RoK Free Trade Agreement (AKFTA) Product Specific Rules from the Harmonised System Codes HS 2017 to HS 2022.
Opportunities for digital technology businesses to go global

Opportunities for digital technology businesses to go global

Finding solutions and directions to promote and develop Vietnamese digital technology enterprises is an important task, which will promote the stability and sustainability of the country's economy, heard a recent conference.
Vietnam, China eye stronger border trade

Vietnam, China eye stronger border trade

Border provinces of Vietnam and China should continue close coordination and enhance trade promotion between the two sides, stressed the recent talks between the management boards of the economic zone of the northern province of Ha Giang and the Malypo border economic cooperation zone of China’s Yunnan province.
Improve competitiveness and sustainable development of the seafood industry

Improve competitiveness and sustainable development of the seafood industry

In early 2024, seafood exports have prospered. This is the driving force that helps seafood businesses hope for a stronger recovery this year.
Business environment reform needs further promotion: expert

Business environment reform needs further promotion: expert

Resolution 02 issued by the Government creates pressure for the ministries, sectors and localities to make changes for the business community as well as the socio-economic development.
Mobile Version