The agreements must now be ratified by the Vietnamese National Assembly and EU member states in the case of the Investment Protection Agreement. Trade and investment agreements develop the commercial dimension of bilateral relations BETWEEN the EU and Vietnam, which are grounded and governed by the EU-Vietnam Framework Agreement on Partnership and Cooperation, which came into force in October 2016. Vietnam currently enjoys trade preferences with the EU under the generalised preference system. The Vietnamese government should also continue on the path of reforms – strengthening the banking sector, eliminating corruption, fine-tuning legal and fiscal structures and improving trade facilities. Vietnam is a member of the Association of Southeast Asian Nations (ASEAN) and a member of the ASEAN Free Trade Area (AFTA). As part of the AFTA, ASEAN members (including Brunei, the Philippines, Indonesia, Laos, Myanmar, Malaysia, Singapore, Thailand and Cambodia) are committed to making the region a competitive trading area. Along with the ASEAN countries, Vietnam has also signed trade pacts with China, the Republic of Korea, Australia and New Zealand, India, Chile and Japan. It signed a bilateral trade agreement with Korea in 2015 and a trade agreement with the Russian-led customs union bloc. Vietnam has concluded all bilateral negotiations on the Trans-Pacific Partnership (TPP) free trade agreement but has not yet ratified the agreement. In February 2016, Vietnam concluded negotiations for a free trade agreement with the EU and is awaiting ratification by the Council of Ministers.
Vietnam is currently negotiating a free trade agreement with EFTA countries (Norway, Iceland, Liechtenstein and Switzerland). The conclusion of the UK-Vietnam Free Trade Agreement by the end of 2020 is a realistic target for three reasons. Vietnam has free trade agreements with many countries in the region, such as Japan, South Korea, etc. Another important free trade agreement in which Vietnam participates is the Trans-Pacific Partnership. It covers countries bordering the Pacific Ocean, such as Japan, Chile, Canada and Australia. With the United States withdrawing from the negotiations, the remaining 11 countries continued negotiations and agreed on the new comprehensive and progressive agreement for the Trans-Pacific Partnership (PPAC). The importance of the CPTPP for Vietnam is much less important than the TPP would have been, given that Vietnam had already concluded free trade agreements with the remaining 11 countries, either bilaterally or through the ASEAN Pact. The APC provides that human rights, democracy and the rule of law are “essential elements” of UE-Vietnam relations as a whole.
Therefore, the link between the free trade agreement and the CPA is important to ensure that human rights are also part of the trade relations between the parties. Vietnam`s Ministry of Planning and Investment has forecast that the CPTP could increase Vietnam`s GDP by 1.3 percentage points by 2035, while EVFTA could increase GDP by 15%. These trade agreements, combined with free trade agreements already signed and to come, should enable Vietnam to remain competitive in the short and medium term.