In December 2015, Vietnam and the EU concluded negotiations on a Free Trade Agreement in order to foster economic growth and liberalize trade. This trade agreement is one of the most ambitious agreements the EU has ever concluded with an economically emerging country. The mutual benefits are profound, since Vietnam will get better access to the EU region consisting of 500 million people and a 22%-share in the global economy. The EU, on the other hand, will get access to the fastest growing economy in Asia, which provides the EU with extensive trade and investment opportunities. At this point, both parties are finalizing and ratifying the trade process and it is expected the agreement will come into force in 2018.
The most important developments in this Free Trade Agreement are related to lowering or even eliminating customs duties on tariff lines for goods imported. Depending on the product and service, these eliminations on customs duties will be implemented gradually over the coming years. Furthermore, if companies from the EU contribute substantially to the Vietnamese economy in a sustainable way, the Vietnamese government can provide subsidies or tax benefits, which could (and should!) incentivize EU companies even more.
Are you interested in the developments and opportunities in your industry? In the coming weeks we will touch upon the impact on different sectors and products, such as dairy, fruit, consumer goods, cars, and so on…
And of course, if you are interested in the impact on your specific sector or product, please feel free to reach out to us!