Free Trade Agreement Singapore And Vietnam
The Free Trade Agreement between the European Union and Vietnam (EVFTA) is the second free trade agreement between the EU and an ASEAN country after Singapore. Vietnam is the second country to have signed trade and investment agreements in the region. EvFTA marks a new chapter in Vietnam`s relations with the EU and, with the EU-Singapore FREE Trade Agreement, paves the way for new trade agreements with other ASEAN members and the EU, and even a multilateral free trade agreement between ASEAN and the EU. The milestones are set, but companies must play their part. Much of the success of these agreements depends on companies becoming familiar with them. As more and more countries want to join the CPTPP and negotiations on the Comprehensive Regional Economic Partnership (RCEP) continue, companies need to start integrating trade agreements into their supply chain and trade planning, especially as we prepare for a recovery of the economy. The APC provides that human rights, democracy and the rule of law are “essential elements” of UE-Vietnam relations as a whole. Therefore, the link between the free trade agreement and the CPA is important to ensure that human rights are also part of the trade relations between the parties. Like the provisions of the World Trade Organization (WTO), the CEFTA is a comprehensive and beneficial agreement for Vietnam and the EU.
The agreement will remove “99% of its import duties over a ten-year period, and the EU will do the same over seven years.” Vietnam will lift 49% of its import duties on EU exports and let the rest expire over a 10-year period. Vietnam can also take advantage of institutional reforms and bilateral cooperation mechanisms and reaffirm to investors that it is the regional investment centre for improving technology, human resources and labour productivity. The Vietnamese Ministry of Commerce considered that the signing of these agreements would create opportunities to participate in the restructuring of new supply chains, amid the consequences of the coronavirus pandemic. Singapore`s history could be an example from which Vietnam can learn. In 2018, however, Harvard University economist Dani Rodrik said in the Journal of Economic Perspective that if these free trade agreements increase the volume of trade, the distribution of these benefits is another matter: “A trade agreement that is covered by another set of special interests can make things worse as easily as it makes them better.” He also wrote that “such an agreement can distract us from the effective outcome, even if it uses the cover of a free trade agreement and increases the volume of trade and investment. Rodrik stressed that the effects of free trade agreements are fundamentally uncertain and that protectionism is depending on them. This agreement will enable EU exporters and investors to access a fast-growing market of 90 million people and consolidate their presence in one of the world`s most dynamic regions. The European Union (EU) and the Socialist Republic of Vietnam signed the European Union-Vietnam Free Trade Agreement (EVFTA) in December 2015. Subject to ratification, the agreement is expected to enter into force in 2018. Previously, Vietnam had already gained preferential access to the EU market through the EU`s Generalised Preference System (GSP) for developing countries.