The National Assembly of Vietnam on Monday ratified a free trade agreement with the European Union (EU), which over the next 10 years will cut or eliminate 99 per cent of tariffs on trade between the two sides.
Lawmakers of the Vietnamese Parliament approved the Europe-Vietnam Free Trade Agreement (EVFTA), which will come into effect in July having also secured the approval of the European Parliament in February, reports Efe news.
When it comes into effect, 71 per cent of Vietnamese exports to the EU will be exempt of tariffs while taxes on the remaining goods will be lifted in the next seven years.
In return, Vietnam will lift 65 per cent of the tariffs on products from EU member countries, while taxes on the remaining goods will be reduced over the next 10 years until 99 per cent of them are eliminated.
Export without tariffs of sensitive Vietnamese agricultural products, such as rice, garlic and eggs, will be limited.
The EU is Vietnam's second largest export destination behind the US, and is also the second largest exporter of goods to the Southeast Asian country, also behind the US.
According to a recent report by the World Bank, the agreement will allow Vietnam to boost its GDP by 2.4 per cent over the next decade thanks to a sharp 12-per cent rise in exports and will help lift tens of thousands of people out of poverty.
The agreement has been welcomed by Vietnamese economists amid the economic depression that has emerged due to the COVID-19 pandemic, a crisis in which Vietnam is seeking to replicate its success in the health sector - it has reported zero deaths due to the virus so far - in the economic arena.
Negotiations between the EU and Vietnam began in 2012 but remained stalled for several years over the latter's refusal to accept human rights and environmental clauses.
Although the agreement that was finally ratified includes a section devoted to these issues, a group of 28 nonprofits reported that it did not commit the Hanoi regime to specific targets.
( With inputs from IANS )