EVFTA expected to help Vietnam's economic recovery

22 Jun '20

2 min read

Pic: Shutterstock

The European Union (EU)-Vietnam Free Trade Agreement (EVFTA) is expected widen Vietnamese exports to the European bloc and help the country’s economy regain its growth momentum after a tough pandemic period. With the EVFTA’s strong commitment to market liberalisation, there is greater scope for Vietnam now to raise its exports, especially in garments, footwear, farming and timber products.

Though many economists earlier believed that the implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would not be as effective as expected without US participation, but the agreement did bring about positive changes to Vietnam’s trade.

Data from the country’s ministry of industry and trade (MOIT) showed that its exports to CPTPP economies in the first year of implementation were estimated at nearly $40 billion, up by 7.2 per cent from a year earlier.

Exports to Canada and Mexico, with which Vietnam has yet to enter into a trade agreement, grew sharply by 29.9 per cent and 27.6 per cent respectively. It is apparent that Vietnam’s export revenue of $260 billion and trade surplus of $10 billion in 2019 saw a fair amount of contribution from the CPTPP, according to a Vietnamese media report.

Similarly, if the EVFTA is soon fully implemented, it will create a great deal of exports opportunities. For years, Vietnamese enterprises have been struggling to establish a firm foothold in the EU market due to strong competition from other countries, especially China.

Fibre2Fashion News Desk (DS)

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