Vietnam is the EUs second-largest trading partner in the Association of Southeast Asian Nations (ASEAN)

Vietnam is the EU's second-largest trading partner in the Association of Southeast Asian Nations (ASEAN)

The EU-Vietnam Free Trade Agreement (EVFTA) will take effect on 1 August following ratification of the trade pact by both parties and over a decade of negotiations.

The implementation of EVFTA is expected to open up a number of strategic cooperation opportunities to promote trade and industry relations between Vietnam and the EU, Vietnam's Ministry of Industry and Trade said today (28 July).

"The EU is a large-capacity market with unity in diversity and plenty of room for growth. At the same time, the structure of goods import and export between Vietnam and the EU is complementary rather than competitive. Successful penetration of the EU market means Vietnam has the opportunity to expand cooperation with 27 member countries at the same time, contributing to solving the output problem of market expansion and diversification, going deep into the global value chain."

Vietnam is the EU's second-largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth EUR47.6bn (US$51.91bn) a year and EUR3.6bn when it comes to services. The main EU imports from Vietnam include telecommunications equipment, clothing, and food products.

At present, only 42% of Vietnamese exports to the EU currently enjoy zero tariffs under the Generalised System of Preferences (GSP).

The FTA provides for the almost complete (99%) elimination of customs duties between the two blocks: 65% of duties on EU exports to Vietnam will disappear as soon as the FTA enters into force, while the remainder will be phased out gradually over a period of up to ten years. The EU will do the same over seven years.

Vietnam approved the agreement on 8 June, following a decision by the European Union in early May to conclude the deal.