Agro-forestry products exports increased sharply one year after the EVFTA came into effect

Corn processing line in Vietnam.

The EU – Vietnam Free Trade Agreement is a win-win trade deal with balanced benefits for both Vietnam and the EU which complies with the provisions of the World Trade Organisation (WTO), and the recent August 1st marks one year since the EU – Vietnam Free Trade Agreement came into effect. As shared by Mr. Luong Hoang Thai, Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), the EVFTA helps Vietnam remove tariffs, promote investment, promote mutual recognition in terms of standards, and improved rules of origin as well as certification of origin.

In addition, the agreement also improves the commercial environment, facilitates trade, provides technical assistance, increases awareness, applies EU market standards. These are the basis for Vietnam to expand exports, attract investment and participate more deeply in the global value chain.

In the first six months of 2021 alone, the rate of EVFTA tax incentives for exports being fully utilized is up to 29.09%. Many key export agricultural and forestry products of Vietnam have experienced significant growth compared to the same period in 2019.

To be more specific, rubber products reached USD 61 million, up 56.91%. Rice reached USD 5.2 million, up 3.73%. Products made from rattan, bamboo, sedge,… reached USD 70.5 million, up 33.75%. Vegetables and fruits reached USD 63.8 million, up 12.5%.

"Taking part in the EU – Vietnam Free Trade Agreement has given Vietnam many opportunities to access high-tech fields, which include agriculture. This is a field full of potential where our country can receive technology transfer, both in production and in processing", said Mr. Thai.

As a new-generation free trade agreement (FTA) with high standards, comprehensive, profound commitments, and at the same time ensuring a balance of benefits for both parties, the EVFTA is considered to have a very important role in promoting economic and trade relations between Vietnam and the EU.

Vice President of the European Commission and Commissioner for Trade of the European Union Valdis Dombrovskis highly appreciated the effective implementation of the EU – Vietnam Free Trade Agreement. He considers the EVFTA to be one of the most successful and specific results for the cooperation relationship between the EU and Vietnam.

"Trade between the two parties has increased significantly in recent years and continues to develop in a positive direction. This agreement not only creates favorable conditions for businesses but also promotes social values for both sides", Mr. Dombrovskis assessed.

In addition to a direct boost to the exportation of agricultural products, the EVFTA also creates innovation and resilience for Vietnam while integrating into the world economy. The Multilateral Trade Policy Department highlights five benefits, which comprise of : (1) Opening a channel to mobilize international investment capital; (2) Promoting technology transfer; (3) Supplementing goods for the domestic market; (4) Opening many markets for import and export and international integration; (5) Creating motivation for the transformation procedure from low-skilled to high-skilled.

Along with economic benefits, the EU – Vietnam Free Trade Agreement also promotes institutional reform. Particularly, the Ministry of Industry and Trade has further reduced 205 business conditions in the field of state management out of a total of 1,216 articles under the management of the Ministry.

In regard to the Government, Decree No. 45/2020/ND-CP on implementing administrative procedures in the electronic environment was soon issued. Along with that, the “Reduce and simplify regulations related to business activities in the period of 2020-2025” Program focuses on reducing and simplifying at least 20% of regulations and 20% of compliance costs related to business activities for the citizens and businesses. This program is being widely deployed in ministries, departments and branches.