Market Watch: Vietnam approves significant trade deal with European Union

HANOI, Vietnam — Vietnam on Monday ratified a significant trade deal with the European Union, which is expected to boost the country’s manufacturing sector and exports, as it recovers from a dip caused by the coronavirus pandemic.

Lawmakers approved the agreement as they met in the National Assembly for the first time since the pandemic began. The deal was signed in Hanoi last June and was ratified by the European Parliament in February.

When it takes effect next month, the EU will lift 85% of its tariffs on Vietnamese goods, gradually cutting the rest over the next seven years. Vietnam will lift 49% of its import duties on EU exports and phase out the rest over 10 years.

The implementation of the EU-Vietnam Free Trade Agreement “can’t come at a better time for Vietnam when it’s on the path of economic recovery after several months of closure due to COVID-19,” said economist Pham Chi Lan, former adviser to several of Vietnam’s prime ministers.

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