Like the provisions of the World Trade Organization (WTO), NAFTA is a comprehensive and beneficial agreement for Vietnam and the EU. The agreement will remove “99% of its import duties over 10 years and the EU will do the same over seven years”. Vietnam will remove 49% of its import duties on EU exports and the rest will expire over 10 years. The ALER is an important milestone in EU-Vietnam relations and further strengthens bilateral economic integration and rules-based trade liberalisation. Vietnam has already taken concrete steps to implement the agreement. Thus, in May 2020, the Vietnamese Ministry of Industry and Trade set up five working groups to assist the relevant government authorities on different aspects of the agreement, including the implementation of rules of origin, certifications and legal documentation. carry out market research on consumer requirements and tastes in the EU; understanding of EU policies and administrative measures that may affect Vietnamese exports; set up information campaigns on the benefits of the agreement; and the fight against fraud at the origin. The AECE covers a wide range of service sectors, including financial services, professional business services, communication services, postal services, related construction and engineering services, health and social protection services, environmental services and transport services. Many of the concessions offered by each party go beyond the concessions granted under the WTO Agreement on Trade in Services, including packaging services, building cleaning services, interdisciplinary R&D services and care services. In some service sectors, such as telecommunications, foreign participation rates for EU investors in Vietnam are increased.
The agreement also obliges Vietnam and the EU to include in future all new service commitments that a party concludes with third countries in the AICE. Singapore has experienced economic growth since the signing of its free trade agreements. These agreements have helped local businesses and investors access overseas markets, raise their products faster and easier, and benefit from tariff concessions, preferential access to certain sectors and IP protection. According to a study by Singapore`s Ministry of Trade and Industry, businesses saved about $730 million in tariffs and bilateral trade increased by $9.7 million and two-way investment increased 26-fold. Both agreements are expected to bring significant benefits to businesses, workers and consumers, both in the EU and in Vietnam. Vietnam`s GDP is expected to grow by 10 to 15 percent, while exports are expected to grow by 30 to 40 percent over the next 10 years. Meanwhile, real wages for skilled workers could rise by 12%, while wages for ordinary workers could rise by 13%. As soon as NAFTA comes into force and government policy and institutional reforms come into force, Vietnam`s activities will be booming. However, challenges remain.
In this chapter, EuroCham`s Legal Affairs Committee will address issues relevant to their respective sectors and make specific recommendations to address these concerns. NAFTA is the most comprehensive and ambitious trade and investment agreement ever concluded by the EU with a developing country in Asia. After Singapore, this is the second agreement in the ASEAN region and will strengthen bilateral relations between Vietnam and the EU. Vietnam will have access to a potential market of about 446 million people and a total GDP of $13.918 trillion. The Free Trade Agreement establishes a framework to settle future disputes between the EU and Vietnam over the interpretation and implementation of the agreement. It applies to most areas of the agreement and, in many ways, it is faster and more efficient than the dispute settlement mechanism in the WTO. To benefit from the preferential duties provided for in CEFTA, distributors must comply with the general rules of origin of the agreement or the product-specific rules of origin and complete a government-issued certificate of origin (form EUR.1) or an origin declaration issued by a certified exporter (i.e. self-declaration of origin).