EVFTA to Increase Investment Attraction

 

EVFTA will come into force from 2018, connecting Vietnam, one of ASEAN’s most dynamic manufacturing hubs, with the EU, one of the world biggest markets (GDP over US$18 trillion – 22 per cent of world GDP, population of over 500 million people). The FTA opens market accessibility for both sides. Imports to Vietnam from EU: 65 per cent of tariffs eliminated at entry into force; 99 per cent of tariffs eliminated within 7 years. EU companies can seek opportunities from market niches such as increasing demand for better quality and healthier food products, pharmaceuticals. Exports from Vietnam to EU: 85.6 per cent of tariffs eliminated at entry into force. 99 per cent of tariffs eliminated within 10 years, including Vietnam’s major exports such as textile, footwear, agricultural products.

 

The EU is currently Vietnam’s second biggest export market and Vietnam is EU’s 11^th biggest source of import. About 900 European enterprises have invested in Vietnam, making it the destination in South East Asia with the largest European business community. This relationship has huge potential for improvement under this important agreement. It can open for European exporter markets that have FTAs with ASEAN but not with the EU, such as China, India or Australia. Rules of origin are challenges, but also opportunities. They give extra incentives to attract supporting industries into Vietnam, improving the supply chain and localization rates.

 

Realizing this trend, Deep C Industrial Zones also organised a tour of the industrial zone to give investors an idea how it actually works in the field and the development pace of Haiphong city with the upcoming Lach Huyen Deep Sea Port. Opportunities and challenges are there for players who are poised to take them.