Vietnam: the new expanding manufacturing hub and the free trade agreement with the EU

The increase in production costs linked to wage growth in China, coupled with the trade war with the US, is pushing more and more companies to Rethinking expansion choices and to head to Asian markets other than China. One of the most attractive countries is Vietnam, in that:

It covers a strategic location inside the’ASEAN, central to all of Southeast Asia.
It has a large working-age population. 48% of the population has between the ages of 25 and 54, and it is estimated that by 2050 the country will reach 120 million of inhabitants 
It is the first Asian country for infrastructure investments, with more than 250 industrial parks, and spends the 5.81% of GDP in education 
over the years, you have implemented important policies of trade liberalization. The last one is the pact with the EU., The EVFTA

On March 30, 2020, it was signed in Brussels the Free Trade Agreement between the European Union and the Socialist Republic of Vietnam, which came into effect on August 1, 2020.

The agreement provides for the near-total elimination of customs duties between the EU and Vietnam, to be implemented over a period of 7 years, including on key European export products to Vietnam: machinery, automobiles, and chemical products. As a consequence, exports from Vietnam to the EU are expected to grow by 15 billion euros per year while EU exports to Vietnam would increase by €8.3 billion per year. In recent years, in fact, our imports have decreased by 14,57% while our exports grew by 12,11% resulting in an improvement in the balance, which nonetheless remains in deficit for Italy.

This agreement is therefore intended to foster EU trade with a rapidly expanding country, with a annual growth of 6-7%, where European investors will undoubtedly have significant development opportunities. 

Octagona can help your company expand its business in Vietnam, as it has a direct presence in the country with its own office, local staff, extensive experience, and a network of professionals in the main ASEAN markets. 

Our team of professionals is available for a free initial consultation and specializes in:

– International Advisory
Sales & Marketing (Direct & TEM) 
Digital Export   
– Foreign regulatory analysis and assistance

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Vietnam: a quick-response country

Vietnam: the new expanding manufacturing hub and the free trade agreement with the EU