The free trade agreement with the EU is expected to benefit Vietnam by expanding export markets and engaging deeper into the global value chain. Negotiations for the deal have ended after six years. With a commitment to cutting down import taxes by over 99 per cent, the deal will bring about great chances for Vietnamese firms to strengthen exports, especially in products Vietnam holds strengths in, such as garments and textiles, footwear, agro-fishery, and timber.

In particular, products that have never been sold in the EU due to tariff barriers will be able to access the market with a competitive price. The FTA will help increase Vietnam’s export revenue by four per cent to six per cent a year in the ten years after it takes effect. This is true especially for the garment and textile sector.

As Vietnam’s and the EU’s export products and economic structures are supplementary without direct competition, the benefit from the deal is huge. However, along with the opportunities, Vietnam will also face some challenges from the FTA from 2019 onwards. Enterprises who wish to export goods to the EU will have to show certificates of origin for their products in order to enjoy the Generalised System of Preferences.