Vietnam: the new growing production hub and the free trade agreement with the EU

The increase in production costs related to wage growth in China, combined with the trade war with the US, pushes more and more companies to rethink your expansion choices and to target Asian markets other than China. One of the most attractive countries is the Vietnam, as:

– Covers one strategic position within theASEAN, central to all of Southeast Asia
– It has a large working-age population. The 48% of the population has between 25 and 54 years old, and it is estimated that in 2050 the country will reach i 120 million of the people living there 
– It is the first Asian country for investments in infrastructure, with more than 250 industrial parks, and spend the 5.8% of GDP in education 
– Over the years it has implemented important policies of trade liberalization. The latest is the pact with the EU, the EVFTA

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

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

This agreement therefore arises with a view to favoring EU trade with a rapidly expanding country, with a annual growth of 6-7%, where European investors will certainly have significant development opportunities. 

Octagona can help your company to expand your business in Vietnam, as it is directly present in the country with its own headquarters, local staff, consolidated experience and a network of professionals in the main ASEAN markets. 

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

– International Advisory
– Sales & Marketing (Direct & TEM) 
– Digital Export   
– Analysis and foreign regulatory assistance

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Vietnam: a country that reacts quickly

Vietnam: the new growing production hub and the free trade agreement with the EU