In recent time, Vietnam and the EU (European Union) inked a first-of-its-type trade deal that would eradicate 99% of tariffs on merchandise imported from the Asian nation to the bloc. As the current US-China tariff battle turns over global trade, a lot of countries are apprehended about dealing with ill effects. However, the EU-Vietnam deal demonstrates that Hanoi is calm to come out of the age as one of the huge beneficiaries. And even though US President Donald Trump recommended in recent time that Vietnam can be his next main tariffs target, the new contract is likely to offer economic cushion for the Southeast Asian country. In fact, the EU described the EU-Vietnam FTA (Free Trade Agreement) as “the most determined free trade agreement ever completed with a developing country.”
Brian Harding–Deputy Director of the Southeast Asia Program at CSIS (Center for Strategic and International Studies)—said, “From Vietnam’s viewpoint, improved access to the EU market cannot come quickly enough.” Currently, Vietnam is the EU’s 16th biggest trade partner the trading bloc’s second-biggest trading associate amongst Southeast Asian nations, as per to the EC (European Commission).In the last year, Vietnam exported services and goods worth of $42.5 Billion to the EU. The worth of imports from the area attained $13.8 Billion, official statistics shows.
On a similar note, recently, analysts said that China’s trade war manufacturing mass departure can be hastened by the EU-Vietnam trade deal. Seemingly, Vietnam’s booming financial system would see another rush of new investment following signing an FTA with the EU that can hasten the exodus of producers from China, analysts said. Now, Chinese companies looking for gaining lower-tariff access to the EU market are expected to be incentivized to start production in Vietnam, on top of the extensive supply chain move that is already in action owing to firms seeking to avert trade war taxes on exports to the U.S. from China.