Tomorrow will mark the formal entry into force of the Free Trade Agreement between the EU and Vietnam (EVFTA). After more than 8 years of negotiations, the EU and Vietnam will now benefit from a unique FTA that will gradually eliminate over 99 % of customs duties on goods and bring dynamic growth in their economic relations. The Federation of the European Sporting Goods Industry (FESI) warmly welcomes this crucial agreement, which will significantly boost sustainable trade in sporting goods with the ASEAN region.
“As the world is currently hit by a global pandemic and protectionism that are affecting all business operations, the entry into force of the EVFTA is now more crucial than ever. Only through free, fair and rules-based trade can we put our economies back on the path to sustainable recovery”, said Neil Narriman, FESI President. “With more than €600 million in annual savings, this FTA is the greatest trade success our industry has ever achieved.”, he added.
Vietnam is one of the EU’s largest trading partners in the Association of Southeast Asian Nations (ASEAN) and the EVFTA represents the most ambitious FTA that the EU has concluded with an emerging economy. With the entry into force of the agreement, 71% of the tariffs on Vietnamese exports to the EU will be abolished as of tomorrow, while the rest will be gradually removed over a maximum of seven years. By securing an open, predictable, and transparent trading environment, the EVFTA represents a turning point for the textile and footwear industry, which counts more than 4 000 companies in the region. FESI played a crucial role throughout the negotiations by providing both EU and Vietnamese negotiators with key information on the needs and specificities of sporting goods companies in the region.
“The sporting goods industry sources athletic footwear and active apparel as well as equipment in Vietnam. The entry into force of this agreement will not only allow for the expansion of our industry, but will also generate greater opportunities for the Vietnamese society through more and improved jobs, as well as better services”, commented Jérôme Pero, FESI Secretary General. “Despite the COVID-19 pandemic, the EVFTA is expected to bring an annual rise of 2.18% to 3.25% of Vietnam’s gross domestic product (GDP) by 2023, sharply increasing both EU and Vietnam export”, he added.
The recent Free Trade Agreement signed in 2019 with Singapore is also a good example of what can be expected in terms of benefits for Vietnam. According to the Ministry of Trade and Industry in Singapore, FTAs have helped local companies access overseas markets, clear their goods more quickly and easily, and safeguard their businesses. In addition, more than 400 000 new highly skilled jobs for local workers were created.
FESI also welcomes Vietnam’s consistent efforts to address labour rights and environmental issues throughout the 8-year negotiation process. By ratifying the ILO fundamental conventions on forced labour and the right to organise and collective bargaining, Vietnam has shown strong commitment to an ambitious reform agenda. The inclusion of strict obligations on sustainable development in the EVFTA will further speed up this process and foster cooperation between the EU and Vietnam on all aspects of sustainable development.