05 Jul UKVFTA and EFTA treaties, how do they impact your business?

In recent years, Vietnam has made significant progress in strengthening its international trade relationships and expanding its global reach. Through a number of key treaties and agreements with countries and regions around the world, the country has created a more favorable environment for international trade and investment, and has established itself as an increasingly important player in the global marketplace.

One of the key treaties that Vietnam has signed in recent years is the UK-Vietnam Free Trade Agreement (UKVFTA), which was signed in 2020 and is expected to come into effect in 2023. The UKVFTA provides a framework for increased trade and investment between the UK and Vietnam, and is aimed at reducing barriers to trade and increasing market access for goods, services, and investment between the two countries.

Another key treaty that Vietnam has signed is the European Free Trade Association (EFTA) Free Trade Agreement, which was signed in 2020 and is expected to come into effect in 2022. The EFTA Free Trade Agreement provides a framework for increased trade and investment between Vietnam and the four EFTA countries (Switzerland, Liechtenstein, Norway, and Iceland), and is aimed at reducing barriers to trade and increasing market access for goods, services, and investment between the two parties.

Under these treaties, a number of tariffs and other trade barriers are expected to be reduced or eliminated, providing new opportunities for businesses in Vietnam and the UK or EFTA countries. For example, under the UKVFTA, tariffs on a range of products, including textiles, footwear, and agricultural products, are expected to be gradually reduced over a period of several years. Similarly, under the EFTA Free Trade Agreement, tariffs on a number of categories of goods, including machinery, electronics, and chemicals, are expected to be reduced or eliminated.

In terms of implementation, each of these treaties will have a specific implementation calendar, with key deadlines and milestones that must be met in order to ensure that the benefits of the agreement are fully realized. For example, under the UKVFTA, the first round of tariff reductions is expected to take place in 2023, with further reductions to be phased in over the following years. Under the EFTA Free Trade Agreement, the first round of tariff reductions is expected to take place in 2022, with further reductions to be phased in over the following years.

In conclusion, the signing of these key international treaties has had a significant impact on the way that Vietnam does business with other countries and regions around the world. By reducing barriers to trade and increasing market access for goods, services, and investment, these treaties have created a more favorable environment for businesses operating in Vietnam and have helped to establish the country as an increasingly important player in the global marketplace. With proper implementation and a commitment to continued cooperation and dialogue, these treaties have the potential to drive long-term growth and success for businesses in Vietnam and the UK or EFTA countries.

Under the UK-Vietnam Free Trade Agreement (UKVFTA), the following is a general implementation calendar:

2022: Preparatory work for the UKVFTA, including the finalization of regulatory measures and the establishment of an institutional framework, will take place throughout the year.

2023: The first round of tariff reductions will take place, with a number of key products, including textiles, footwear, and agricultural products, seeing reduced tariffs.

2024-2025: Further tariff reductions will be phased in over the next two years, with additional products seeing reduced tariffs.

2026: The full implementation of the UKVFTA is expected to be completed, with all tariffs and trade barriers having been reduced or eliminated.

Under the European Free Trade Association (EFTA) Free Trade Agreement, the following is a general implementation calendar:

2021: Preparatory work for the EFTA Free Trade Agreement, including the finalization of regulatory measures and the establishment of an institutional framework, will take place throughout the year.

2022: The first round of tariff reductions will take place, with a number of key products, including machinery, electronics, and chemicals, seeing reduced tariffs.

2023-2024: Further tariff reductions will be phased in over the next two years, with additional products seeing reduced tariffs.

2025: The full implementation of the EFTA Free Trade Agreement is expected to be completed, with all tariffs and trade barriers having been reduced or eliminated.

It’s important to note that these implementation calendars are subject to change and may be adjusted based on a variety of factors, including the progress of negotiations, the development of new trade agreements, and changing market conditions. Nevertheless, the signing of these treaties and the establishment of a clear implementation calendar represents an important step forward for businesses operating in Vietnam and is a strong indication of the country’s commitment to building stronger relationships with key trading partners around the world.