• Concluded in December 2015, the EU-Vietnam FTA has been described by the European Commission as the most ambitious deal of its type ever concluded between the EU and a developing country.
  • Businesses are now calling on the European Commission to ratify and implement the deal as soon as possible.
  • It will eventually see the removal of more than 99% of tariffs on goods traded between the two economies – and is isexpected to substantially expand Vietnam's textile and apparel exports to the EU market.
The FTA could boost Vietnams economy by as much as 15% of GDP, with Vietnamese exports to Europe growing by over one-third

The FTA could boost Vietnam's economy by as much as 15% of GDP, with Vietnamese exports to Europe growing by over one-third

A group of business associations, including Amfori and the Federation of the European Sporting Goods Industry (FESI), have joined forces in urging the European Commission to ratify and implement the EU-Vietnam free trade agreement as soon as possible.

Finalised in December 2015, the trade deal has been described by the European Commission as the most ambitious deal of its type ever concluded between the EU and a developing country. It will eventually see the removal of more than 99% of tariffs on goods traded between the two economies.

In a joint letter, 19 business associations this week appealed to Jean-Claude Juncker, the President of the European Commission, for swift ratification of the deal.

"The EU needs to act swiftly to avoid even further delay of the entry into force. We call on the European Commission, the Council and the European Parliament to refrain from taking the EVFTA hostage for institutional reasons, to the detriment of consumers and businesses on both sides.

"We acknowledge that other recently concluded agreements require attention and resources; it is, however, vital to respect the patience already shown by other third countries. We urge the EU not to side-line the EVFTA, since doing so sends the wrong message to our trading partners and hurts the EU's credibility in the global trading community."

In the letter, the signatories ask the EU institutions and the Member States to take account of, and take decisive action on: submitting the trade parts of the agreement to the Council after its College meeting today (18 April); to put Vietnam on its agenda for their meeting in May and initiate discussions immediately thereafter with the European Parliament; and to aim for the agreement's ratification and entry into force by the end of 2018.

"By addressing the above concerns, we can ensure that EU Trade Policy continues to deliver on its promise of economic growth, job creation and engagement on issues of sustainable development," the associations conclude.

Not only will the trade deal eliminate almost all customs duties on goods, it will also open up Vietnamese service markets to EU companies and strengthen protection of EU investments in the country.

According to European Commission figures, the FTA could boost Vietnam's economy by as much as 15% of GDP, with Vietnamese exports to Europe growing by over one-third.

Other signatories to the letter include AmCham EU, European Services Forum (ESF), European Chamber of Commerce in Vietnam (EuroCham Vietnam), and British Business Group Vietnam (BBGV).

The EU-Vietnam free trade agreement is expected to substantially expand Vietnam's textile and apparel exports to the EU market. The EU's import duties on textiles and apparel from Vietnam will be eliminated through a seven-year phaseout period once the agreement comes into force. Garments produced in Vietnam from fabrics made in South Korea or other ASEAN countries with which the EU has a free trade agreement will also qualify for duty-free treatment.