Vietnam has made visible efforts and progress to meet the high standards of NAFTA. From 1 August 2020, the agreement will create sustainable growth, bring mutual benefits in different sectors and be an effective instrument for balancing EU-Vietnam trade relations. In addition, the EU grants market access preferences to several Vietnamese industries. Import duties applied in the EU to clothing will have extraction periods of five to seven years for the most sensitive products and three years and, if they enter into force, for less sensitive products. The EU largely offered duty-free tariff rate quotas for Vietnamese rice exports. Other products that have gained improved market access through duty-free tariff quotas are sweet maize, garlic, mushrooms, sugar and sweetened products, cassava starch, surimi and canned tuna. Unprocessed shrimp will be liberalised from the entry into force and Pangasius will be liberalised in three years` time. In addition, Vietnam has the fastest growing middle class in the region. The size is expected to almost double between 2014 and 2020 (from 12 million to 33 million people). Vietnam`s very wealthy population is also growing faster than elsewhere, and there is no doubt that it will continue to grow over the next ten years. The bilateral trade and investment agreements concluded by the EU in March 2020 with Vietnam and the trade agreement are expected to enter into force within the summer of Vietnam`s final ratification.
After those with Singapore, the agreements with Vietnam are the second between the EU and a Southeast Asian country and provide stepping stones for increased engagement between the EU and the region. Vietnam currently benefits from trade preferences with the EU under the Generalised System of Preferences. The free trade agreement focuses on duty-free trade. It contains the total elimination of almost all tariffs, with the exception of certain tariff lines subject to duty-free tariff quotas. When importing products originating in the EU into Vietnam, machinery and appliances, medicines, chemicals, textiles and fisheries (salmon, halibut, trout and man) will benefit from the immediate elimination of customs duties. Tariffs on auto parts, motorcycles, frozen pork, food preparations, wines and spirits are reduced over a seven-year period; Tariffs on cars, chicken and beer will be eliminated for more than 10 years….