The European Union (EU) and Vietnam signed a free trade agreement (FTA) in June 2019, which is expected to bring significant economic and social benefits to both parties. The FTA eliminates almost all tariffs between the two sides and includes provisions for the protection of labor rights and the environment.

Economic benefits

The FTA is expected to increase trade between the EU and Vietnam by more than 50% over the next 10 years, according to a study by the European Commission. Vietnam`s exports to the EU are expected to increase by 42% by 2025, while EU exports to Vietnam are expected to increase by 27%. This will boost economic growth and create jobs in both regions.

Vietnam`s key export sectors such as textiles, footwear, and agriculture will benefit from the elimination of tariffs, making their products more competitive in the EU market. The EU will also benefit from greater access to Vietnam`s market, particularly in the automotive, pharmaceutical, and wine sectors.

Social benefits

The FTA includes provisions for the protection of labor rights and the environment. Vietnam has committed to implementing International Labor Organization conventions on collective bargaining, forced labor, and child labor, among others. The FTA also includes provisions on environmental protection, such as commitments to combat illegal logging and the trade in endangered species.

This will lead to improvements in working conditions and environmental protection in Vietnam, which will benefit workers and the broader population. The FTA also includes provisions to encourage small and medium-sized enterprises (SMEs), which make up the vast majority of businesses in both the EU and Vietnam, to take advantage of the opportunities presented by the agreement.

Conclusion

The EU-Vietnam FTA is a win-win for both sides. It will boost economic growth, create jobs, and improve working conditions and environmental protection in Vietnam. It will also provide the EU with greater access to Vietnam`s market, particularly in key sectors such as automotive, pharmaceuticals, and wine. The FTA is a significant step in strengthening economic ties between the EU and Vietnam and promoting free trade and sustainable development.