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. At this stage, free trade between the EU and Vietnam is a sign of improved international economic relations. This cooperation aims to protect the rights of the different actors in both environments by recognising reciprocal norms. It also provides more comfort and less danger for local workers in their daily lives, so they can do their jobs properly and fairly. Similarly, almost 100% of Vietnam`s exports to the EU will be eliminated after ten years. So far, this is the highest commitment a partner has given to Vietnam in a trade agreement. This is particularly important when the EU has been one of the country`s two main export markets. Under the EVFTA, Vietnam has not only opened up additional sub-sectors to EU service providers, but has also made deeper commitments than mentioned in the WTO to enable the EU to access the Vietnamese market as much as possible. Among the sub-sectors that Vietnam is committed to under the EVFTA (but not the WTO) are: interdisciplinary research and development (R and D); care services, physiotherapists and paramedics; Packaging services Fairs and exhibitions Services and Building Cleaning Services. The EU and Vietnam have agreed on a strong and comprehensive chapter on trade and sustainable development, with a comprehensive list of commitments, including: 1 In 2017, the European Court of Justice found that certain provisions of the EU-Singapore Free Trade Agreement on non-direct foreign investment and investor-state settlement are not within the exclusive competence of the EU and must be ratified by national parliaments EU Member States. To raise opposition to the trade agreement, the EU and Singapore agreed to divide the agreement into two separate agreements.
Negotiations between the EU and Vietnam followed the same process. In 2018, the part of the investment agreement was divided into a separate investment protection agreement, EUVIPA. The EU-Singapore PPI national ratification process is underway and is expected to take at least two years. 2 For more details, please see Appendix 9-B below. 3 Vietnam became an observer of the WTO GPA on 5 December 2012. In February 2020, the European Parliament ratified a free trade agreement (FTA) and an Investment Protection Agreement (PPI) with Vietnam. MEPs (ENPs) voted in favour of the agreements in Strasbourg. Vietnam has overtaken its regional rivals Indonesia and Thailand, and is the EU`s second largest trading partner in ASEAN.
Today, EU companies have the opportunity to apply for contracts with Vietnamese ministries and state-owned enterprises throughout the country. Vietnam will allow European investors to award public contracts to ministries such as the Ministry of Defence, Vietnam Railways Corporation and dozens of public hospitals, under the control of the Ministry of Health. The European Commission estimates that the agreements would help increase exports to Vietnam by 29% in 2035 and increase GDP to $29.5 billion. The entry into force of TUEFTA comes amid growing global trade tensions with China. Combined with the ongoing COVID 19 pandemic, this has contributed to the growing trend of companies diversifying their supply chains, with Vietnam rapidly becoming the main beneficiary.