Vietnam ratified a free trade agreement with the European Union on Monday that will cut or eliminate 99% of tariffs on goods traded between the Southeast Asian country and the bloc, and provide Vietnam with a much-needed post pandemic boost.
Deputies in the National Assembly, which nearly always ratifies government proposals, voted by over 94% in favour of the European Union Vietnam Free Trade Agreement (EVFTA).
The EVFTA, expected to take effect in July, is the European Union’s second deal with a member of the Association of Southeast Asian nations (ASEAN) after Singapore, and one of few with a developing country.
Vietnam will have a transition period of up to 10 years for some imports, such as cars.
It will open up Vietnam’s services, including post, banking and shipping and public procurement markets, align some standards and protect EU food and drinks, such as French champagne or Greek feta cheese, from imitations in Vietnam.
The World Bank said in May the EVFTA could boost Vietnam’s gross domestic product and exports by 2.4% and 12% respectively by 2030 and lift hundreds of thousands of people out of poverty.
“Such benefits are particularly urgent to lock in positive economic gains as they country responds to the COVID-19 pandemic,” the World Bank said.