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The European Parliament (EP) on February 12 ratified the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA).

The EVIPA was passed with 407 votes for, 188 against and 53 abstentions; and the EVFTA, with 401, 192 and 40, respectively.

Illustrative image (Photo: VNA)

The EVFTA is expected to create a major push for Vietnam’s exports, helping diversify the country’s exports and markets. Under the agreement, Vietnam will cut 65 percent of import tax on EU commodities right after the deal takes effect, while the rest will be erased in a 10-year period. Meanwhile, the EU will cut more than 70 percent of tariff on Vietnam’s commodities right after the deal takes effect, while the rest will be abolished in the seven subsequent years.

The two documents were signed in Hanoi on June 30 last year. They include intensive, extensive and comprehensive commitments covering the fields of economy, trade, investment and sustainable development issues.

According to a research by the Ministry of Planning and Investment, the two deals will help Vietnam increase its GDP by 4.6 percent and its exports to the EU by 42.7 percent by 2025. Meanwhile, the European Commission has projected the EU’s GDP to increase by 29.5 billion USD and its exports to Vietnam by 29% by 2035.

The investment intensive and extensive commitments will replace bilateral investment agreements between Vietnam and the EU members, helping the country continue to reform its economic structure, perfect business environment and institutions, and facilitate EU investors’ business in Vietnam.