spiritsNEWS February 2016

EU-Vietnam FTA: Let’s speed up the process

On 1 February, Vietnam and the EU published the near-final text of the Vietnam-EU Free Trade Agreement (EVFTA) signed on 2 December 2015.

 

Vietnam is a high growth market for European spirits, having witnessed a 730% increase in exports over the last decade - from €5m in 2004 up to €42m in 2014.  Nonetheless, the full potential of the market, fuelled by the country’s sustained economic growth and dynamic demographics, has yet to be unleashed.  Imported products represent only 19% of the Vietnamese market and the agreement between the EU and Vietnam will lift barriers that were an obstacle to growing the EU market share.

 

First and foremost, the EU-Vietnam FTA foresees the full elimination of the 45% import tariff after a period of seven years.  Secondly, the agreed rules of origin will allow for the use of logistical hubs in the region while benefiting from the tariff concession provided by the FTA.  The use of such hubs is essential for our export activities.  Finally, EU exports depend in large part on the reputation of our high quality products.  It is good to see that Vietnam agrees to improve its Intellectual Property Rights legislation to protect a list of spirits products covered by European Geographical Indications (GIs).  We hope that at a later stage Vietnam will see the benefit of introducing a legal prohibition against removing traceability information, such as lot codes, which are vital for health and safety matters.  

 

Globally, the FTA will improve our business environment in Vietnam - but those benefits may disappear if the agreement is not ratified and implemented soon

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