Since 2012, the European Union and Vietnam have been attempting to reach an agreement on a free trade deal (EVFTA), but it has been held up for several years due to a series of legal hurdles. The European Parliament gave its consent for the EU-Vietnam free trade and investment protection agreement in February 2020, however, Vietnam ratified this trade deal on 8th June 2020, as they are hoping to energize the country’s manufacturing sector, as it recovers from the impact of the coronavirus pandemic.
With economic growth up 6-7% every year, Vietnam is one of the world’s fastest-growing economies and the EU’s second-largest trading partner in Southeast Asia. Vietnam’s major exports to the European Union include garments, footwear, textiles, electronics, and agricultural goods, all of which are required to meet the EU standards from a list put together by the government.
Benefits of EU-Vietnam Trade Deal
This agreement will remove nearly all tariffs, aiming to eliminate 99% within seven years. Goods traded between the two economies, will help to contribute towards further market access. This should result in €15 billion a year in additional exports from Vietnam to the EU by 2035 and EU exports to Vietnam should expand by €8.3 billion annually.
After the deal goes into effect, the EU will lift 85% of its tariffs on Vietnamese goods and gradually decrease the rest over the coming seven years. Vietnam will lift 49% of its import duties on EU exports, phasing out the rest over the next 10 years.
Lower or free tariff rates, together with benefits such as low operating costs, stable political conditions and cheap labour are essential reasons for considering Vietnam as a prime location for your sourcing needs.
Quality Control & HQTS Group
Supply chain quality control is especially vital amid the coronavirus pandemic and engaging with a professional third-party quality control provider inside the factory, will ensure your specifications and standards are being met for your sourcing requests.
With over 25 years of experience in quality assurance, HQTS is ready to help your business build strong and meaningful supplier relationships across Asia. Our worldwide service locations are ready to be your one-stop-shop for all your inspection needs including; factory audits, production monitoring, pre-shipment and sorting inspections. These steps will ensure you know exactly what’s happening throughout the process. Contact us today to find out how we can help you with any quality control challenges currently happening in your industry.