EVFTA and EVIPA signed for new era trade and investment

16:00 | 30/06/2019
The EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Promotion Agreement (EVIPA) were officially signed today in Hanoi, with expectations of giving a big push for trade and investment.
evfta and evipa signed for new era trade and investment
The two sides signing teh trade and investment agreements

Minister of Industry and Trade Tran Tuan Anh said at the signing ceremony, “The completion of negotiations and signing of these two agreements will further strengthen bilateral relations that are growing strongly in many fields between Vietnam and the European Union, deepening economic and commercial relationships to make the most of each other's advantages and potentials to benefit both sides.”

evfta and evipa signed for new era trade and investment
The signing of the EU-Vietnam Investment Promotion Agreement (EVIPA)

Minister of Planning and Investment Nguyen Chi Dung said, “The EVFTA and EVIPA are two new-generation agreements of a very high quality and ensure the balance of interests of the parties. The signing of these agreements will contribute to accelerating Vietnam's reform and economic integration, not only in traditional trade but also in institutional and administrative procedures, improving investment, business, intellectual property, government procurement, labour, and sustainable development, building Vietnam's economy on the principles of market economy and good international practices, especially of the European Union.”

He stressed that the Vietnamese government believes that the signing of the EVIPA will contribute to attracting high-quality investment from EU investors and creating good opportunities for Vietnamese investors to access the EU market. This is perfectly in line with the orientation to attract foreign direct investment (FDI) in the coming time.

Dung said, “To realise the opportunities and benefits from the implementation of these agreements, together with solutions to develop quality human resources, continuing to develop infrastructure, and improving the competitiveness of the Vietnamese economy and enterprises, the government has ordered the review and improvement of institutions and investment and business policies. Accordingly, the government will study, review, and propose adjustments to the National Assembly to consider, amend, supplement or promulgate some important laws such as the Law on Investment, the Law on Enterprise, the Law on Investment, the Land Law, and the Law on Construction, as well as the Law on Environmental Protection, the Labour Code, and some Tax Laws to further simplify and create favorable conditions for market entry and the implementation of investment and business activities of people and businesses, including foreign-invested enterprises, and complete mechanisms and policies to attract the private sector.”

evfta and evipa signed for new era trade and investment
The EVFTA and EVIPA will further strengthen bilateral relations that are growing strongly in many fields between Vietnam and the European Union

Prime Minister Nguyen Xuan Phuc expressed hope that the EVFTA and the EVIPA will be a "large-scale highway", helping to enlarge the speed and scale of co-operation, trade, and investment between Vietnam and the EU.

evfta and evipa signed for new era trade and investment
Prime Minister Nguyen Xuan Phuc speaking at EVFTA and IPA signing ceremony

The trade agreement will eliminate nearly all customs duties on goods traded between the two sides in a progressive way that fully respects Vietnam's development needs. The agreement also contains specific provisions to remove technical obstacles, such as those in the car sector, and will ensure that 169 traditional European food and drink products recognised as Geographical Indications are protected in Vietnam. Thanks to the agreement, EU companies will also be able to participate in bids for procurement tenders in Vietnam on an equal footing with domestic companies.

Besides offering significant economic opportunities, the EU and Vietnam have agreed on strong sustainable development measures. This includes a commitment to implement the Paris climate agreement effectively. The agreement also commits both sides to respect and effectively implement the principles of the International Labour Organisation (ILO) concerning fundamental workers' rights.

To this end, Vietnam has recently ratified the ILO Convention on collective bargaining and has notified the EU of its intention to ratify the two outstanding fundamental ILO conventions by 2023 at the latest. It is also in the process of reinforcing its labour legislation. The agreement also establishes dedicated platforms for the EU and Vietnam to involve civil society in the implementation of these commitments.

In addition, the trade agreement includes an institutional and legal link to the EU-Vietnam Partnership and Co-operation Agreement, allowing appropriate action in the case of human rights' breaches.

The investment protection agreement includes modern rules on investment protection enforceable through the new Investment Court System and ensures that the right of the governments on both sides to regulate in the interest of their citizens is preserved. It will replace the bilateral investment agreements that 21 EU Members States currently have in place with Vietnam, putting in place new legal guarantees preventing conflict of interest and increasing transparency.

Joint statement by EU Trade Commissioner Cecilia Malmström and Minister of Industry and Trade Tran Tuan Anh on the occasion of the signing of the Free Trade Agreement and the Investment Protection Agreement between Vietnam and the European Union

Following the implementation of the Vietnam-EU Comprehensive Partnership and Co-operation Framework Agreement (PCA), these agreements mark a milestone in our strong partnership. They will promote further economic development and reinforce trade and investment ties between Vietnam and the European Union, thereby deepening our cooperation and strengthening our long-lasting relations. As the most ambitious free trade deal between the EU and an emerging economy to date, the agreements are based on the joint commitment of the two sides to open, fair, and rules-based trade liberalisation and economic integration. The agreements also further reinforce the EU’s engagement with the Southeast Asian region, which contributes to the strengthening of cooperation between ASEAN and the EU, aiming towards closer trade and investment relations between the two regions. Following the signatures, the agreements will now be presented on the Vietnamese side to the National Assembly for ratification and on the EU side to the European Parliament for its consent, as well as to the respective national parliaments of the EU Member States in the case of the Investment Protection Agreement. We hope for a swift ratification of the agreements by these legislative bodies in the coming months, in order to allow our businesses, workers, farmers and consumers to reap their benefits as soon as possible.

Both sides share a strong commitment to the effective implementation of both agreements and are cooperating closely to ensure full compliance with the obligations under these agreements. The EU will support Viet Nam through technical assistance in order to define and follow up on an implementation plan to facilitate the necessary reforms and adjustments, including in areas such as sanitary and phytosanitary measures and non-tariff barriers.

Beyond their economic benefits, the agreements also aim at promoting sustainable development in both Vietnam and the EU. In this context, both sides agree on the importance to ensure the implementation of the obligations under the Trade and Sustainable Development chapter of the trade agreement. The EU welcomes the recent positive steps taken by the National Assembly of Vietnam on labour issues, namely the ratification of ILO Convention 98 on Collective Bargaining and the plan to adopt the revised labour code at its next session in theautumn of 2019. The EU also welcomes the plan of the Government of the Socialist Republic of Vietnam to submit the ILO Convention 105 and 87 to the National Assembly of Vietnam for the ratification procedures. The involvement of stakeholders in the implementation of this chapter in both the EU and Vietnam, through Domestic Advisory Group, is also crucial for its effectiveness. The agreements are an integral part of the framework established by the EU-Vietnam Partnership and Cooperation Framework Agreement, which governs our overall bilateral relations in various areas, including development cooperation, peace and security, trade and investment, judicial cooperation, social affairs, good governance, rule of law and other issues of common interest.

The EU and Vietnam look forward to continuing working together to ensure these ambitious agreements can deliver to their full potential.

By Phuong Thu

Based on MasterCMS Ultimate Edition Ver 2.8 2018