EU – Vietnam free trade agreement moving forward
As a member of Eurocham Executive Committee, FinnSEA participated today in a seminar to promote and inform
Vietnamese companies about the opportunities and activities related to the upcoming trade agreement between EU and
Vietnam, EVFTA. This was one the several similar events to promote the FTA and trade between Vietnam and EU countries.
The agreement will gradually lower the customs duties between the participants to 0%. This will highly benefit the
Vietnamese manufacturing industry and enhance the position of Vietnam as key manufacturing HUB of ASEAN economic
The main speakers in the event were mr. Vo Tan Than, chaiman of the chamber of commerce of Vietnam (VCCI) Ho
Chi Minh section, and mr. Jean-Jacques Boufflet, Vice Chairman of the Eurocham Vietnam.
What are the effects? Improved market access is one of the key objectives of any trade agreement. The EU-Vietnam
trade agreement contains full dismantling of nearly all tariffs except for a few tariff lines that are subject to duty-free tariff
Widespread coverage is achieved already at entry into force with 65% of EU exports to Vietnam coming in duty-
free from day one. The remaining trade – with the exception of a few products – will be liberalized after 10 years. The EU will
liberalize 71% of its imports from Vietnam from day one and 99% will enter duty-free after seven years.
Custom duties will be removed over a transitional period (of a maximum period of seven years for Vietnamese goods and 10 years for EU goods) so that domestic producers can gradually adapt. Consumers from both sides will benefit from lower prices and exporters from strengthened competitiveness
EXAMPLES OF BENEFITS FROM TARIFF ELIMINATION FOR EU EXPORTERS
• Almost all EU exports of machinery and appliances will be fully liberalised at entry into force of the FTA.
• Around half of EU pharmaceutical exports will be duty free immediately and the rest after seven years.
• All EU textile exports will be liberalised at entry into force.
• Car parts will be duty free after seven years.
• Motorcycles with engines larger than 150 cc will be liberalised after seven years and cars after 10 years except those with
large engines (>3000cc for petrol, >2500cc for diesel) which will be liberalised one year earlier.
• Close to 70% of EU chemicals exports will be duty free at entry into force and the rest after three, five and seven years
• Frozen pork meat will be duty free after seven years, dairy products after five years and food preparations after seven
years. Chicken will be fully liberalised after 10 years.
• As for fisheries, Vietnam has accepted liberalisation at entry into force for salmon, halibut, trout and rock lobster and others
after three years.
• Wines and spirits will be liberalised after seven years and beer after 10 years.
• Vietnam will maintain existing WTO tariff rate quotas (albeit with reduction of the in-quota rate to zero over 10 years) for
refined sugar, salt and eggs.
• EU duties on textile apparel have dismantling periods stretching from five to seven years for the more sensitive items and
three years and at entry into force for less sensitive goods. Footwear also gets the longest EU staging period, of seven
years, for sensitive EU items and three years or elimination at entry into force on items which are less sensitive(1).
• The EU offered mostly duty-free tariff rate quotas for Vietnamese rice exports: 30,000 tons of milled rice; 20,000 tons of
husked rice (in product weight, equal to 13,800 tons milled equivalent); for broken rice: 50% tariff cut at entry into force and
then linear reduction over 5 years; 30,000 tons fragrant rice.
• Other products which received improved market access via duty-free tariff rate quotas include sweet corn (quota of 5,000
tons and liberalisation for baby corn), garlic (quota of 400 tons), mushrooms (quota of 350 tons), sugar and high-sugar-
containing products (combined quota of 20,000 tons), manioc starch (quota of 30,000 tons), surimi (quota of 500 tons) and
canned tuna (quota of 11,500 tons and strict rules of origin; liberalisation of fresh/chilled tuna);
• Non-processed shrimps will be liberalised as of entry into force;
• Pangasius (catfish) will be liberalised in three years.
1. On footwear, Vietnam agreed on a solution based on an ex-out definition, which enables liberalisation of athletic/sports
footwear either at entry into
force or in three years; the rest of the footwear products will be liberalised in seven years.
(source: GUIDE TO THE EU-VIETNAM TRADE AND INVESTMENT AGREEMENTS)
Contact Pietro Karjalainen for more information on EVFTA and the trade opportunities in Vietnam
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- EU – Vietnam free trade agreement moving forward - August 28, 2019