According to economic experts, the signed FTA between EU and Vietnam is expected to encourage the investment wave from European businesses into Vietnam.
The first wave marks a trend of some manufacturing companies transferring from Europe to Vietnam for competitive production costs, especially when import tax is dramatically reduced, even to zero. Vietnam will be beneficial from increased employment for abundant young and well-trained labour at lower cost.
The second wave indicates the emergence of European businesses providing products that can meet the mid and long term demands of the Vietnamese market. These companies are expected to focus on enhancing manufacturing capacity and together with foreign products to supply the local market with high quality products.
Over the past few years, the Vietnam- EU trade relation has witnessed a significant growth. The current two-way product and service trade has reached approximately 40 billion Euros annually and is expected to climb to 100 billion Euros in 2025. By exploiting this relation, the bilateral economic relation can be raised to a higher level.
EVFTA can be considered as a new generation FTA between Vietnam and 28 EU member states. EVFTA and Trans-Pacific Partnership (TPP) are FTAs that have largest and highest commitment by range and level of Vietnam so far. On December 1st 2015, EVFTA negotiation had come to conclusion and the text was announced on February 1st 2016. EVFTA is expected to take effect in 2018.
IPA DANANG
