The recently signed Vietnam-EU Free Trade Agreement (VEFTA) between Vietnam and the EU is set to take effect in 2018. Under the light of the development, 2018 onwards nearly all tariffs between the South-east Asian country and the EU will be eliminated for both the parties over a period of up to seven years. Both the participants now have two years to prepare for the bilateral trade pact. In this duration, European investors will be closely scrutinising what the Vietnamese Government will do to attract investment. The FTA was signed in Brussels after nearly three years with 14 rounds of negotiation.
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The trade pact illustrates the EU’s aspiration to be an important partner in Vietnam’s sustainable development, emphasized Bruno Angelet, Ambassador of the EU to Vietnam. The EU is now Vietnam’s second-biggest trade partner (the first spot is taken by China), which is of immense significance for the Vietnamese apparel and textile sector. Moreover, the EU stands only behind the US as the second-largest export market of the South-east Asian nation, according to the EU chief representative.
Angelet expressed his belief that the VEFTA will enable Vietnam to improve its competitiveness compared to other ASEAN nations. According to AFP, Brussels and South Korea already have a free trade agreement and the EU is holding separate talks with Malaysia, Thailand and Japan to close similar free trade deals.