Free Trade Agreement between the Eu and Vietnam

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Free Trade Agreement Between the EU and Vietnam: Benefits and Challenges

The European Union (EU) and Vietnam signed a free trade agreement (FTA) on June 30, 2019, after almost three years of negotiations. The FTA, also known as the EU-Vietnam Investment Protection Agreement (EVIPA), aims to boost trade and investment flows between the two parties by reducing or eliminating tariffs, enhancing market access, improving regulatory coherence, and protecting intellectual property rights. The FTA covers a wide range of sectors, from goods and services to government procurement and sustainable development. Overall, the FTA offers both opportunities and risks for businesses, consumers, and policymakers in the EU and Vietnam.

Benefits of the FTA

The FTA has several potential benefits for the EU and Vietnam. First, it facilitates trade by removing most tariffs on goods and services traded between the two parties. For example, Vietnam will eliminate tariffs on 71% of EU goods and some services in the first year of the FTA`s entry into force, and the rest will be phased out over the next decade. The EU will eliminate tariffs on 84% of Vietnamese goods and some services in the same period. This means that businesses in both regions can increase their exports, reduce their costs, and diversify their markets.

Second, the FTA enhances market access by opening up public procurement markets to EU and Vietnamese companies, and by reducing non-tariff barriers such as technical regulations, sanitary and phytosanitary measures, and customs procedures. This means that companies can compete for more contracts and operate more smoothly across borders, which can boost innovation and productivity.

Third, the FTA improves regulatory coherence by promoting transparency, consultation, and cooperation between the EU and Vietnam in areas such as intellectual property rights, competition policy, and sustainable development. This means that companies can benefit from predictable and consistent rules and standards, which can reduce uncertainty and enhance trust.

Fourth, the FTA protects intellectual property rights by enforcing higher standards of copyright, trademark, and patents, and by tackling piracy and counterfeiting. This means that companies can benefit from stronger legal protection of their brands, inventions, and creations, which can increase their value and competitiveness.

Challenges of the FTA

The FTA also poses some challenges for the EU and Vietnam. First, it may create uneven effects across sectors and regions, as some industries and areas may benefit more from the FTA than others, while some may face more competition or adjustment costs. For example, the FTA may benefit EU exporters of machinery, chemicals, and pharmaceuticals, but challenge Vietnamese farmers, garment workers, and small and medium-sized enterprises (SMEs) that may face more competition from cheaper or higher-quality imports from the EU.

Second, the FTA may raise environmental and social concerns, as some sectors may benefit from laxer or non-enforced regulations or standards, while others may suffer from environmental degradation, labor exploitation, or human rights abuses. For example, the FTA may increase the demand for raw materials, energy, and transportation, which may negatively impact the climate, biodiversity, and public health. The FTA also includes a provision for sustainable development, which aims to ensure that economic growth goes hand in hand with social and environmental progress, but its effectiveness remains to be seen.

Third, the FTA may face geopolitical and strategic challenges, as it may affect the relationship between the EU and other countries or regions, such as the United States, China, or ASEAN. For example, the FTA may strengthen the EU`s position in Southeast Asia and counter China`s influence, but it may also trigger a backlash from the US, which has been critical of Vietnam`s human rights record and trade practices.


The free trade agreement between the EU and Vietnam offers both opportunities and challenges for both parties. The FTA can boost trade and investment flows, enhance market access and regulatory coherence, and protect intellectual property rights. However, the FTA may also create uneven effects across sectors and regions, raise environmental and social concerns, and face geopolitical and strategic challenges. Therefore, the FTA requires careful monitoring and evaluation, as well as cooperation and dialogue between the EU and Vietnam, to ensure that it delivers its intended benefits and mitigates its potential risks.

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