EVFTA Agreement and predictions from the European import and export market

The COVID-19 epidemic has greatly affected the production and import-export situation of not only Vietnam but also worldwide. Many economic experts also said that this year's economic growth will not achieve the set goals. In this context, the Vietnam-EU Free Trade Agreement (EVFTA), effective from August 1, 2020, was put into effect, helping to offset the economic slowdown in the period. Disease. From the business side, EVFTA is also affirmed as the ultimate solution to bring more diverse market opportunities for businesses, helping businesses regain post-epidemic growth momentum.

In fact, in recent years, domestic enterprises are still struggling in the European market due to competition from other large-scale industries in the world, especially China. Product prices of Vietnam are usually 10-20% higher than in your country. As a result, Vietnam's market share of goods in the EU is modest. Meanwhile, EU is the 2nd largest import market in the world. Every year, the EU imports about US $ 2,338 billion, while Vietnam's export market share in the EU is about 2% with just over 42% of Vietnam's exports to the EU enjoying 0% tax rate under the Preferential Program. universal tariff (GSP). Therefore, with the commitments of strong market opening, commitment to eliminate import taxes to nearly 100% of the tariff schedule in EVFTA, the opportunity to increase our country's exports is huge, especially for goods. advantages such as textile, footwear, agricultural and aquatic products, wooden products ...

The study shows that the EVFTA Agreement will increase Vietnam's export turnover to the EU by about 20% by 2020; 42.7% in 2025 and 44.37% in 2030 compared to no agreement. At the same time, imports from the EU have increased but at a lower pace than exports, namely about 15.28% in 2020; 33.06% in 2025 and 36.7% in 2030. In macro terms, EVFTA contributes to Vietnam's GDP to increase at an average of 2.18 - 3.25% (2019 - 2023); 4.57 - 5.30% (2024 - 2028) and 7.07 - 7.72% (2029 - 2033). In addition, in terms of imports, Vietnamese businesses will also benefit from the source of goods and raw materials imported with good and stable quality at a more reasonable price from the EU.

Thus, in the post-epidemic phase, if the EVFTA Agreement is put into effect, Vietnamese enterprises will have a great advantage from reducing / eliminating tariff barriers on the EU market to exploit the market USD 18 trillion.

Similarly in terms of imports, Vietnamese businesses will also benefit from good and stable sources of imported goods and raw materials at a more reasonable price from the EU, especially the source of machinery, equipment and labor. High technology / technology from EU countries will help improve productivity and improve the quality of our products. In addition, when goods and services imported from the EU into Vietnam will create a competitive pressure for Vietnamese enterprises to strive to improve their competitiveness.

Notably, with EVFTA, a new value chain of Vietnam with an important partner in the world will be formed. The investment environment is more open and favorable, when the prospect of more attractive exports will attract more FDI from the EU to Vietnam, especially in areas such as services, finance, automobiles and manufacturing. manufacturing, information technology, high technology, processed agricultural products ... Associated with that, the requirements set out in improving the business investment environment, institutions, legal policies after the road. border ... towards greater transparency, convenience and compliance with international practices will be important prerequisites for Vietnam to accelerate development to a new height.

Phaata (Source: Ministry of Industry and Trade of Vietnam)

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