EU trade agreement to cut tariffs hinh anh 1Workers of Southern Food Company in HCM City load rice onto a boat for export. The EU will set aside large quotas for VN's unprocessed rice and fragrant rice. Photo: VNA
After the Free Trade Agreement between EU and Vietnam (EVFTA) comes into effect, the EU will eliminate 85.6 percent of tariff lines which account for 70.3 percent of Vietnamese export value to the EU, according to the Ministry of Industry and Trade.

It was announced in early August that after almost three years and 14 official rounds of talks and many mid-term negotiations between ministers, heads of delegations and technical groups, Vietnam and the EU have reached an agreement on all basic points of the EVFTA.

Products to benefit from the pact immediately after it takes effect include honey, fruit and vegetable both fresh and processed, fruit juice, bags and suitcases, and plastic, ceramic and glass products.

Seven years after the agreement takes effect, the EU will eliminate 99.2 percent of tariff lines for Vietnam, equivalent to 99.7 percent of Vietnamese export turnover with the remainder of export turnover enjoying zero-duty tariff rate quotas.

The EU will also eliminate duties on garment, textile, footwear and seafood products excluding canned tuna and fish balls over a seven-year period.

The EU will set aside large quotas for Vietnamese rice both process and unprocessed and fragrant rice. Rice imported to the EU under this quota will enjoy duty free classification, while tariff on broken rice will be phased out and products made from rice will gradually become fully liberalised within seven years.

Vice-versa, almost all EU exports of machinery and appliances will be fully liberalised at entry once the pact comes into force and the rest after five years. Motorcycles with engines larger than 150 cc will be liberalised after seven years and cars after 10 years, except those with large engines (over 3000cc for petrol, over 2500cc for diesel) which will be liberalised one year earlier.

Car parts will be duty free after seven years. Roughly half of EU pharmaceutical exports will be duty free at entry into force and the rest after seven years.

Entire EU textile fabric exports will be liberalised at entry into force. Close to 70 percent of EU chemicals' export will be duty free at entry into force and the rest after three, five and seven years.

Vietnam will also open its market for most EU food products, both primary and processed, allowing EU high quality exports to reach its growing middle class consumers.

The EU is currently the second biggest trade partner and one of the two largest export markets of Vietnam.

Twenty-three of 28 EU member nations had invested in Vietnam by the end of 2014 with over 2,000 valid projects worth more than 37 billion USD. The EU investments are present in almost all important economic sectors of Vietnam.-VNA