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 tariff war with the U.S., 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 the Vietnam, in that:

- It covers a strategic location within the’ASEAN, central to all of Southeast Asia.
- It possesses a large working-age population. The 48% of the population has between the ages of 25 and 54, and it is estimated that in 2050 the country will reach the 120 million of inhabitants 
- It is Asia's leading country in infrastructure investment, with more than 250 industrial parks, and spends 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

March 30, 2020 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 pact envisions the near total elimination of customs duties between the EU and Vietnam, to be implemented within the 7-year time frame, including on major European export products to Vietnam: machinery, automobiles and chemicals. As a result, 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 the 14,57% while our exports grew by 12,11% leading to an improvement in the balance, which still remains in deficit for Italy.

This agreement is therefore in the spirit of facilitating EU trade with a booming country with a annual growth of 6-7%, where European investors will certainly have significant opportunities for development. 

Octagona can help your company expand your business in Vietnam, as it has a direct presence in the country with its own office, local staff, established expertise, and a network of professionals in major 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