EU-Vietnam Free Trade Agreement (EVFTA) Ratified
The European Council recently ratified the free trade agreement with Vietnam, signaling a significant development for the country’s trade relations. The agreement is set to eliminate tariffs on Vietnamese shrimp, currently ranging from 12% to 20%, gradually reducing them to zero over a period of seven years.
Implementation and Benefits of EVFTA
Upon ratification by the Vietnamese National Assembly in May, the EU-Vietnam Free Trade Agreement (EVFTA) is expected to come into effect at the beginning of the summer. The agreement entails Vietnam immediately slashing import taxes by 65% on EU commodities, with the remaining tariffs phased out over a 10-year period.
Similarly, the EU will substantially reduce import taxes on Vietnamese commodities, starting with a reduction of over 70% once the agreement is implemented, and the remaining tariffs will be eliminated over the course of seven years.
Signing and Timeline
The EVFTA was signed in Hanoi, Vietnam, in June 2019, along with the EU-Vietnam Investment Protection Agreement. This significant milestone further solidified the trade relationship between Vietnam and the European Union.
Impact on Vietnam’s Shrimp Industry
In 2019, the value of Vietnam’s shrimp exports reached $3.36 billion, experiencing a modest decline of 5.4% compared to the previous year. However, the ratification of the EVFTA is expected to bring substantial advantages to Vietnam’s shrimp industry in the foreseeable future.
The ratification of the EU-Vietnam Free Trade Agreement marks a pivotal moment for Vietnam’s trade landscape, particularly for its shrimp industry. The gradual elimination of tariffs on Vietnamese shrimp exports to the European Union over the next seven years is poised to enhance market access and provide significant opportunities for growth. This agreement showcases the commitment of both parties to foster mutually beneficial trade relations and lays a foundation for a stronger partnership in the years to come.