EVFTA- Promising agreement at highest level commitment that Vietnam has ever had
What is EVFTA?
- EVFTA is a free trade agreement between The European Union and the Socialist Republic of Vietnam.
- Time of validation: from the date of entry into force of this Agreement. Starting date is Arrival date of the goods in EU.
EVFTA’s promising benefits
- Eliminate or deduct import custom tariffs: import tariff of 99% of export products to Europe will be eliminated or deducted to 0%, maximum within period 8 years on originating goods provided for items in staging category A, B3, B5, B7 when buying Apparel and Clothing products which satisfy 2 conditions: products need to be produced in Vietnam and fabric origin from Vietnam and/or Korea and/or the EU.
- Custom Duty will be determined by the HS Code of the product. Each HS Code has been classified in the 4 following categories:
A= Immediately Free / 0%
B3 = shall be removed in 4 equal annual stages / 3% reduction p.a.
B5 = shall be removed in 6 equal annual stages / 2% reduction p.a.
B7 = shall be removed in 8 equal annual stages / 1.5% reduction p.a.
Note: Vietnam exporter can choose the most favorable treatment with lowest custom tariff between different trade agreements such as EVFTA, GSP form A (Generalized System of Preferences),… For example, current import tariff 9.6% for goods has GSP form A (Vietnamese material) will be continued to apply as long as it is lower than the tariff under the EVFTA.
- Certification and self-certification: Vietnamese exporters will need government certificates (Certificates of Origin-C/O) or self-certification or EUR.1 certificate for export goods. EU approved Vietnamese exporters can make use of self-certification in case of consignments not exceeding the value of €6000. In the future the EU may move to a system of registered exporters (REX).
EUR.1 is a form used in international commodity traffic. The EUR.1 is most importantly recognized as a certificate of origin in the external trade in legal sense, especially within the framework of several bi – and multilateral agreements of the Pan-European preference system (the European Union Association Agreement).
- October 2010: Vietnam’s PM and EU’s President agreed to start EVFTA negotiations;
- 2018: after rounds of negotiation, the European Union (EU) and Vietnam decided to split single text from beginning into 2 texts: EVFTA and IPA (Investment Protection Agreement);
- 25 June 2019: the European Council approved the content of EVFTA and IPA;
- 30 June 2019: two texts EVFTA and IPA were signed by EU and Vietnam in Ha Noi, Vietnam;
- 29-31 October : A delegation from the Parliament’s International Trade (INTA) Committee came to Hanoi, to discuss the FTA/IPA with Vietnamese parliamentarians and government officials;
- 6-7 November: INTA Committee debate on draft recommendations for consent;
- 2-3 December: INTA Committee debate on proposed amendments to the recommendations;
- 20-21 January 2020: INTA Committee vote on the recommendations;
- February 2020: vote on the recommendations and consent at the Parliament’s plenary session;
- Assuming the Parliament gives its consent in February 2020;
- The EVFTA can be ratified by the EU alone, without involving the Member States because EVFTA covers exclusive EU competences. Therefore, the FTA will come into force one month after Vietnam and the EU have notified each other that legal procedures have been completed.