The tax incentive mechanism of the EU-Viet Nam Free Trade Agreement (EVFTA) will bring great benefits to Vietnamese industries and products, according to Minister of Industry and Trade Tran Tuan Anh.

He discussed the official conclusion of the legal review process for the EVFTA and agreement on the bilateral investment protection deal in an interview with Vietnam News Agency in Ha Noi on Thursday after his recent working trip to Belgium.

The minister said that at a working session with EU Commissioner for Trade Cecilia Malmstrom in Brussels on June 25, the two sides agreed to divide content related to investment protection and investor-state dispute settlement (ISDS) into a separate deal called the Investment Protection Agreement (IPA).

The EU and Viet Nam had completed all content in preparation for the signing and ratification of the EVFTA and IPA, he said, adding that the legal review process for the two deals had been finalised.

Viet Nam was striving to complete the final stages to reach the signing of the EVFTA at the end of this year, he said.

He noted that up to 99 per cent of EU tariffs would be removed for Vietnamese products.

Farm produce, seafood, sugar, honey, processed agricultural products, timber products, garment-textiles and the automobile industry are expected to enjoy preferential tariffs from the deal.

Viet Nam’s exports to the EU are estimated to rise by 4-6 per cent thanks to the deal.

A central benefit is that the structure of exports and economy of Viet Nam and the EU is supplementary, not directly competitive, so businesses can gain from win-win cooperation.

Sectors like processing and manufacturing, automobiles, information technology, agriculture, livestock and processed food should also experience some competitive pressure.

Increasing competitiveness and building value chains with partners will help enterprises develop and bring investment efficiency.

The EU is a leading trade and investment partner of Viet Nam.

The EU is likely to invest in Viet Nam in fields such as services, finance, automobiles, processing, manufacturing, information technology, high technology and processed farm produce. These are also fields in which Viet Nam needs investment and development.

Minister Tuan Anh advised businesses to optimise opportunities and incentives from the EVFTA. He also underlined the role of the State and Government to help firms gain the most benefits from the pact.

He advised small- and medium-sized enterprises (SMEs) to study the market and adopt solutions such as creating high-quality and eye-catching products and meeting the requirements on the origin of products, technical and safety standards. — VNS