Since coming into effect in August 2020, the EVFTA has become one of the most important turning points in the history of Vietnam - EU economic relations in general and Vietnam - France in particular. In the context of the world facing unprecedented fluctuations from the COVID-19 pandemic, geopolitical conflicts and disruptions in the global supply chain, the EVFTA has demonstrated its important role as a stable "anchor" for bilateral trade relations.
Mr. Vu Anh Son pointed out that one of the most outstanding features of the past 5 years is the exceptional resilience of the Vietnam-France trade relationship. He emphasized: "Five years after the EVFTA officially took effect, the trade relationship between Vietnam and France has not only recorded impressive growth in scale but also demonstrated strong resilience and adaptation to unprecedented disruptions in the global supply chain."
The 2021-2024 period marked a strong recovery with Vietnam-France export turnover increasing from 6.1 billion to 7.5 billion USD, equivalent to an increase of 23% compared to the beginning of the period and far exceeding the peak before the COVID-19 pandemic (6.5 billion USD in 2019). Mr. Vu Anh Son analyzed: "EVFTA not only brings tariff benefits but also promotes reforms in rules of origin, improves the quality of goods management, and expands access to logistics, finance and insurance services".
A particularly important highlight is the official upgrading of the relationship between the two countries to a "Comprehensive Strategic Partnership" during the visit of General Secretary To Lam in October 2024. This event not only strengthens political and diplomatic ties, but also opens a period of deeper economic and trade cooperation, with the expectation that bilateral trade will maintain a compound growth rate of 6-7% per year, towards the target of 12-15 billion USD in two-way trade.
In terms of investment attraction, EVFTA has played an important role with commitments on investment protection, national treatment and most-favored-nation treatment. French capital flows focus on high-value-added sectors such as precision engineering, renewable energy, environment, pharmaceuticals and high-tech agricultural products. Mr. Vu Anh Son emphasized: "The presence of corporations such as Schneider Electric, Pernod Ricard, Boehringer Ingelheim... has raised the level of management capacity and quality of Vietnamese products, helping domestic enterprises access the European market with strict standards."
Mr. Vu Anh Son pointed out that the success of the industries does not come by chance, but is "the resonance of three main factors: Direct competitive advantage from tariff incentives, timing when the need to diversify Europe's supply chain increases, and the internal capacity and initiative of Vietnamese enterprises".
Textiles and footwear are identified as the two industries that benefit most directly and clearly from EVFTA. Before the agreement came into effect, these two industries were subject to quite high import tariffs into the EU. The gradual elimination of tariffs according to the roadmap has created a competitive price advantage for Vietnamese products. Major French retail brands such as Decathlon have benefited and significantly increased orders from Vietnam.
The agricultural and aquatic products sector has witnessed spectacular growth and is a clear demonstration of its ability to penetrate demanding market segments. Mr. Vu Anh Son shared: "The success story of Vietnamese rice is a typical example. Thanks to trade promotion efforts and taking advantage of duty-free quotas, Vietnamese rice has successfully penetrated large French supermarket chains such as Carrefour and Leclerc". This is thanks to pioneering enterprises investing in production, processing and traceability processes according to GlobalG.AP and ASC standards, overcoming the EU's strict technical barriers.
Although less mentioned than textiles or agricultural products, electronics, machinery and components are the largest export groups, playing an important role in the global supply chain. Vietnam has become an important electronics manufacturing and assembly center, with products such as phones, computers and electronic components accounting for a large proportion of exports to France and the EU.
However, Mr. Vu Anh Son also frankly pointed out a worrying paradox: "The growth in absolute value does not go hand in hand with deeper market penetration". A report from the French Ministry of Finance shows that since 2019, the market share of Vietnamese goods in this market has not increased significantly, showing that removing tariff barriers is just the beginning.
Regarding the garment sector, Mr. Vu Anh Son said that the EU is tightening regulations on circular economy and sustainable fashion, requiring products to have a longer lifespan, be easy to recycle and have a certain recycled fiber content - a big challenge in terms of technology and investment costs.
The agricultural, forestry and fishery sectors are also facing increasingly stringent barriers from the EU, known as the "Green Wall", including sanitary and phytosanitary measures (SPS) with standards on pesticide and antibiotic residues that are among the strictest in the world.
The biggest challenges at present come from the EU’s new regulations on sustainable development. The EU Supply Chain Due Diligence Directive (CSDDD), which will come into effect from July 2024, requires large companies in the bloc to be legally responsible for negative impacts on human rights and the environment throughout their supply chains. In addition, the Carbon Border Adjustment Mechanism (CBAM) imposes a “carbon tax” on energy-intensive imports, reducing the competitiveness of Vietnamese products if they are not produced using “Green” processes.
Faced with these barriers, Mr. Vu Anh Son believes that they need to be turned into a driving force for development. The Head of the Vietnam Trade Office in France believes that the EU Green Deal is both a great challenge and a unique opportunity for Vietnam to innovate and rise up. "Vietnam can turn this challenge into a leading advantage by strategically combining the implementation of the Just Energy Transition Partnership (JETP) with meeting the standards of CBAM and CSDDD."
To overcome challenges and move up the value chain, Mr. Vu Anh Son suggested that Vietnam should focus on three strategic pillars: First, building strong domestic industrial capacity. Vietnam needs to shift from a passive "FDI attraction" model to a proactive industrial policy, with targeted incentives for supporting industries, especially FDI in upstream sectors such as textiles and dyeing, specialized chemicals and high-tech components. Second, modernizing logistics and digital infrastructure to reduce costs and increase competitiveness. Third, developing high-quality human resources to meet the requirements of new industries and international standards.
Mr. Vu Anh Son also emphasized the importance of proactive economic diplomacy. Vietnam needs to actively negotiate Mutual Recognition Agreements (MRAs) with the EU on conformity assessment and technical standards to reduce the burden of inspection and certification for exported goods. At the same time, it is necessary to work with the European Commission to introduce a carbon pricing mechanism and Vietnam's greenhouse gas reporting standards that are recognized as equivalent to the EU's, thereby minimizing the impact of CBAM.
The biggest internal challenge that Vu Anh Son pointed out is policy coordination. “Issues such as trade, industry, infrastructure, education, environment are deeply interconnected, but they are often managed by different ministries in separate ‘siloes’,” he stressed. Therefore, he recommended the establishment of a national steering committee on leveraging FTAs and upgrading value chains. “This is not just adding another layer of bureaucracy. It is a structural solution to a structural problem,” he stressed.
Looking ahead, Mr. Vu Anh Son expressed optimism about the prospects of Vietnam-France cooperation within the EVFTA framework, saying that after 5 years of implementation, this agreement has contributed to strongly promoting bilateral trade relations. According to him, EVFTA not only brings economic benefits but also acts as a strategic stabilizing factor in the relationship between the two countries.
With the upgrading of relations to a Comprehensive Strategic Partnership, he expected new breakthroughs in Vietnam-France economic and trade cooperation. Vietnam is gradually asserting its position not only as a processing point but also as an important and indispensable link in the global value chain.
Mr. Vu Anh Son affirmed: "In a volatile world, EVFTA has helped build a flexible and resilient Vietnam-France supply chain, consolidating Vietnam's position as a reliable trade partner in the Indo-Pacific region". With a solid foundation over the past 5 years, along with clear strategic directions, Vietnam-France trade relations within the framework of EVFTA promise to continue to develop strongly, contributing positively to the goal of achieving high turnover in the coming years.
Source: https://baolaocai.vn/5-years-of-EVFTA-implementation-of-a-strong-revealing-step-in-the-trade-policy-of-vietnam-phap-post650113.html
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