On the Free Trade Zone between Vietnam and the European Union

Abstract

On February 12, 2020, the European Parliament officially ratified a free trade agreement with Vietnam — at a time when an infectious disease caused by COVID-19 is actively spreading around the world, which can significantly affect the European economy, investment, and social sphere.

Aim. The presented study aims to demonstrate that implementation of the EU-Vietnam Free Trade Agreement (EVFTA) has the potential not only to increase the volume of trade, but also to activate new mechanisms of comprehensive cooperation between Europe and Vietnam while maintaining their mutual interest.

Tasks. The authors summarize structural changes in the exports and imports of goods in the medium term; show a reduction in the interest rate on tariffs for goods exported from Vietnam to the European Union (EU) and goods coming from the EU to Vietnam; examine the growth dynamics of Vietnamese exports in 2020, 2025, and 2030, the dynamics of the EU exports to the Socialist Republic of Vietnam (SRV) in the same years, and the growth of trade balance surplus.

Methods. This study uses general methods to analyze free trade zones in a multilateral and bilateral format, which will be reflected in the study of the Eu-Vietnam free trade zone.

Conclusions. Vietnam has accumulated significant experience in organizing free trade zones during the transition from a command economy to a market economy in 1986-2019, thus creating conditions for sustainable economic growth and becoming a country with many advanced and new technologies, higher income and living standards of the population. Based on a high level of strategic partnership with advanced countries, including the EU, United States, Republic of Korea, Japan, and Russia, Vietnam has ensured its economic security and has become a guarantor of peace in the East Asian region.