Vietnam: Deepening International Integration and Implementing the EVFTA

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Publication Date May 2020
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Following from Vietnam’s ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in late 2018 and its effectiveness from January 2019, and the European Parliament’s recent approval of the European Union-Vietnam Free Trade Agreement (EVFTA) and its subsequent planned ratification by the National Assembly in May 2020, Vietnam has further demonstrated its determination to be a modern, competitive, open economy.

As the COVID-19 (Coronavirus) crisis has clearly shown, diversified markets and supply chains will be key in the future global context to managing the risk of disruptions in trade and in supply chains due to changing trade relationships, climate change, natural disasters, and disease outbreaks. In those regards, Vietnam is in a stronger position than most countries in the region. The benefits of globalization are increasingly being debated and questioned. However, in the case of Vietnam, the benefits have been clear in terms of high and consistent economic growth and a large reduction in poverty levels. As Vietnam moves to ratify and implement a new generation of free trade agreements (FTAs), such as the CPTPP and EVFTA, it is important to clearly demonstrate, in a transparent manner, the economic gains and distributional impacts (such as sectoral and poverty) from joining these FTAs.

In the meantime, it is crucial to highlight the legal gaps that must be addressed to ensure that national laws and regulations are in compliance with Vietnam’s obligations under these FTAs. Readiness to implement this new generation of FTAs at both the national and subnational level is important to ensure that the country maximizes the full economic benefits in terms of trade and investment. This report explores the issues of globalization and the integration of Vietnam into the global economy, particularly through implementation of the EVFTA.

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Reuters, 19/05/2020: EU trade pact to support Vietnam's coronavirus recovery: World Bank

World Bank: Press Release, 21/05/2020: Decisive Reforms Needed for Vietnam to See Full Benefits of EU Trade Agreement: Report

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