Vietnam Trade Agreement Eu
Vietnam Trade Agreement with the EU: The Benefits and Challenges
Vietnam and the European Union (EU) recently signed a free trade agreement (FTA) which is set to boost bilateral trade and investment. The agreement, which was signed on June 30th 2019, is expected to bring great benefits to both Vietnam and the EU. In this article, we will discuss the benefits and challenges Vietnam is facing with the new trade agreement with the EU.
Benefits for Vietnam
With the new trade agreement, Vietnam is expected to enjoy a boost in exports as well as an increase in foreign investment. The agreement will help to enhance the competitiveness of Vietnam`s exports and improve investment climate. This will further support Vietnam`s economic growth and create more job opportunities for the locals.
The agreement will provide access to the EU`s market, which is one of the world`s largest. The EU`s 28 member states have a combined GDP of over $17 trillion, which means that the trade agreement has the potential to significantly increase Vietnam`s revenue. Vietnam`s exports to the EU currently account for around 16% of their total exports. With the implementation of the new agreement, the percentage is expected to increase by 42.7% in the next decade.
Challenges for Vietnam
Despite the benefits, there are also challenges that Vietnam needs to overcome to make the most of this trade agreement. One of the biggest challenges is the strict regulations set by the EU regarding product safety and environmental protection. In order to be able to export to the EU, Vietnamese companies must comply with these regulations. This can be a daunting task, especially for small and medium-sized enterprises (SMEs) that lack the knowledge and resources to meet these requirements.
Another challenge is the fierce competition from other ASEAN member states that have signed FTAs with the EU, such as Singapore and Malaysia. The competition from these countries may pose a challenge for Vietnam in capturing a larger share of the EU`s market.
Conclusion
The Vietnam-EU trade agreement is a significant milestone for Vietnam`s economy and will provide a boost in exports and foreign investment. However, Vietnam must also be ready to face the challenges that come with it. Vietnam should invest in research and development, improve its production standards, and ensure that its SMEs are well-equipped to compete in this new market. By doing so, Vietnam can fully maximize the benefits of this trade agreement and further strengthen its economic growth.