The tax incentive mechanism of the EU-Vietnam Free Trade Agreement (EVFTA) will bring great benefits to Vietnamese industries and products, according to Minister of Industry and Trade Tran Tuan Anh.

Workers at a timber export company in Vietnam

He talked about the official conclusion of legal review process for the EVFTA and agreement on the bilateral investment protection deal in an interview granted to Vietnam News Agency in Hanoi on June 28 after his recent working trip to Belgium.

The minister said at a working session with EU Commissioner for Trade Cecilia Malmstrom in Brussels on June 25, the two sides agreed to divide contents related to investment protection and investor-state dispute settlement (ISDS) into a separate deal called the Investment Protection Agreement (IPA).

The EU and Vietnam have completed all contents in preparation for the signing and ratification of the EVFTA and IPA, he said, adding that the legal review process for the two deals has been finalised.

Vietnam is striving to complete the final stages to reach the signing of the EVFTA at the end of this year, he said.

He noted that up to 99 percent of EU tariffs will be removed for Vietnamese products.

Farm produce, seafood, sugar, honey, processed agricultural products, timber products, garment-textile and automobile industry are expected to enjoy preferential tariffs from the deal.

The EVFTA is hoped to boost Vietnam’s exports to EU, which will rise by 4-6 percent.

A central benefit is that the structure of export and economy of Vietnam and EU is supplementary, not directly competitive, so businesses can gain win-win cooperation.

Sectors like processing and manufacturing, automobiles, information technology, agriculture, livestock and processed food should also consider competitive pressure.

Increasing competitiveness and building value chains with partners will help enterprises develop and bring investment efficiency.

The EU is a leading trade and investment partner of Vietnam with nearly 22 billion USD.

The EU is likely to invest in Vietnam in fields such as services, finance, automobiles, processing, manufacturing, information technology, high technology and processed farm produce. These are also fields that Vietnam needs investment and development.

Minister Anh advised businesses to optimise opportunities and incentives from the EVFTA. He also underlined the role of the State and Government to help firms gain the most benefits from the pact.

He advised small-and-medium-sized enterprises (SMEs) to study the market and adopt solutions such as creating high-quality and eye-catching products and meeting the requirements on the origin of products, technical and safety standards.-VNA