EuroCham disclosed the information at an event in Brussels, Belgium on Monday during the release of its latest report, “The EVFTA: Perspectives from Vietnam,” together with amfori and BusinessEurope. This launch event, with 70 participants, is part of a EuroCham mission to the European Parliament and European Commission to push for a quick ratification of the EVFTA.

EuroCham’s report includes the results of a new survey of the Chamber’s members, who were asked how the EVFTA will affect their business operations. Over 130 responded – more than 10% of EuroCham’s membership – and the results were striking.

Just under 80% of EuroCham members believe that the trade pact will have either a ‘significant’ or ‘moderate’ impact on their business in the medium and long-term.

Meanwhile, over 80% believe that the pact will result in Vietnam becoming more competitive compared to other regional countries, and 72% said that it will help Vietnam to become a hub for European business in the Association of Southeast Asian Nations region.

On top of the positive economic benefits, EuroCham members believe that the EVFTA will help improve a range of social and environmental issues in Vietnam, from welfare and environmental protection to transfers of knowledge, the advancement of the local workforce and workers’ rights.

Of note, 33% of EuroCham members believe that the pact will have a ‘significant’ impact on improving sustainable development and environmental protection.

The report also includes the reflections of business leaders, non-governmental organizations, economists, entrepreneurs and workers. In their own words, each contributor shares their personal perspective on Vietnam’s progress since the Doi Moi economic renovation reforms first opened up Vietnam to foreign investment, along with how the EVFTA will help Vietnam to further integrate within the international community and global economy.

Vietnam is now one of the fastest-growing economies in the world, with an annual gross domestic product per capita growth of 5.3% since Doi Moi – the second-strongest growth in the region, behind China. That strong economic growth has created new jobs and raised standards of living for millions of people.

The EVFTA represents an historic change in EU-Vietnam relations. It will boost trade and investment on both sides, EuroCham stated in the report.

The agreement is expected to eliminate almost all tariffs between the EU and Vietnam, removing tariffs on 65% of the value of EU exports when the pact enters into force, with the remaining tariffs being phased out over the next decade.

Meanwhile, 71% of EU imports from Vietnam will become tariff-free once the trade pact enters into force, rising to more than 99% over the following seven years.

Also, customs duties will be largely eliminated over a transitional period of seven years for Vietnamese goods, and ten years for EU goods. This will be a ‘win-win’ for business and consumers, in the form of lower prices and greater competitiveness, according to EuroCham.

“This report provides clear evidence that the EVFTA is a ‘win-win’ for Europe and Vietnam. Our members paint a positive, optimistic picture of the agreement, with 85% anticipating a significant or moderate impact on their business and investment plans in the long-term,” said Nicolas Audier, Co-Chairman of EuroCham Vietnam.

In the EVFTA, Vietnam has gone further than the World Trade Organization in terms of market access granted to EU service providers. Additional sub-sectors will be opened up, giving the EU the best possible access to Vietnam’s market. The FTA also contains a ‘most favored nation’ clause.

The EU is the fifth-largest foreign investor in Vietnam. Data from the Vietnamese Ministry of Planning and Investment shows that European firms had almost 2,500 foreign direct investment (FDI) projects, valued at some US$44 billion in Vietnam last year, making up 10% of total FDI projects and 14% of FDI capital.

In 2017, trade in goods between the EU and Vietnam was worth over EUR47 billion (US$53.8 billion). European imports from Vietnam accounted for EUR37 billion, including products such as footwear, textiles and clothing, coffee, rice, seafood and furniture. Meanwhile, European exports to Vietnam reached EUR10 billion, including electrical equipment, aircraft, vehicles and pharmaceutical products.