The Europe-Vietnam Free Trade Agreement (EVFTA) was signed by representatives of both parties on Sunday in Hanoi. While this is not the final step for execution of the agreement, this is a major milestone and will, more than likely, lead to adoption by the EU.
In this article, here, Nicolas Audier discusses the benefits of the EVFTA in much more depth than I possibly could as he has been involved with the negotiations in his role with the EUCHAM here in Vietnam.
In this article, here, the South China Morning Post announces the news.
The EVFTA is an important step for Vietnam’s entry into the global economy. It has been a long time coming with negotiations initiated back in 2012. The agreement, should it be adopted by the EU later this year, will allow for the importation of many, and eventually all goods between Europe and Vietnam. There are also sections covering certain services for European investors that were not included in the WTO Agreements acceded to over ten years ago.
Most exciting, though, is perhaps the inclusion of an investor dispute resolution forum for European investors. Vietnam has not become a member of relevant treaties that allow for investors to lodge disputes against the government for takings and other interference with their investments. That the EVFTA will include such dispute resolution procedures is a first, and important, step for Vietnam in entering the international trading community.
When I was in Laos we took advantage of such treaties to lodge protests and dispute resolution procedures against the government of that country because they had, in essence, taken our investment. That dispute is still ongoing the last I checked, but it is a forum which allows investors to take action against investor host governments in such a way as to protect their investments against arbitrary takings.
This has long been a loophole in Vietnam’s investment scheme and with this EVFTA, a major avenue for taking action against such takings is now in place. An important aspect of international trade and a welcome sign of Vietnam’s increasing globalization.