On 8 June 2020, the National Assembly of Vietnam unanimously ratified the new free trade agreement between Vietnam and the European Union (“TFUE”) and the UE-Vietnam Parallel Agreement on Investment Protection (EUVIPA). It was preceded by the approval of both agreements by the European Parliament on 12 February 2020. The TFUE came into force on 1 August 2020. EUVIPA, which falls under the shared competence1 of the EU and its member states, is currently being nationally ratified by the regional and national parliaments of the EU Member States. The TFUE is discussed below. We will treat EUVIPA separately if this agreement is ratified and enters into force. Vietnam has free trade agreements with many countries in the region, such as Japan, South Korea, etc. Another important free trade agreement in which Vietnam participates is the Trans-Pacific Partnership. It covers countries bordering the Pacific Ocean, such as Japan, Chile, Canada and Australia. With the United States withdrawing from the negotiations, the remaining 11 countries continued negotiations and agreed on the new comprehensive and progressive agreement for the Trans-Pacific Partnership (PPAC). The importance of the CPTPP for Vietnam is much less important than the TPP would have been, given that Vietnam had already concluded free trade agreements with the remaining 11 countries, either bilaterally or through the ASEAN Pact.
Read more: EU signs free trade agreement with Vietnam This agreement will allow EU exporters and investors to access a fast-growing market of 90 million people and consolidate their presence in one of the world`s most dynamic regions. Such agreements illustrate the strength of EU-Vietnam relations and the opportunities Europe sees in the Southeast Asian country. The EU is achieving a long-term goal of increasing its influence and expansion in ASEAN markets by targeting Vietnam, and European entrepreneurs will have better access to one of the fastest growing Asian economies when the agreements come into force. Despite the interruption of the coronavirus pandemic and the slowdown in the global economy, Vietnam is expected to continue to record economic growth of 4.8% this year, returning to 6.8% in 2021. The TFUE marks the second comprehensive trade agreement between ASEAN and the EU and could well serve as a model if the EU decides to pursue free trade agreements (“FTAs”) with other ASEAN countries or with ASEAN as a regional bloc in the future. With TUEFTA, Vietnam is expanding its free trade agreement to another strategic economic and trade partner. Vietnam currently has bilateral free trade agreements with Japan, South Korea, Chile and the Eurasian Economic Union (of which Russia is a member). It is also a party to six regional free trade agreements concluded by ASEAN member states with China, Hong Kong, India and other countries and is a party to the Comprehensive and Progressive Trans-Pacific Partnership (PPC) agreement, which includes Australia, Canada, Mexico and New Zealand. Recent changes in the EU, particularly Brexit, could have an impact on the outcome and importance of the EVFTA. For now, the UK Free Trade Agreement will enter into force by the end of the year and could be renewed for a further 24 months, in line with the agreement between the UK and the EU.