Trade Growth and Economic Impact

Since the implementation of the EVFTA, bilateral trade has experienced substantial growth. Vietnam’s exports to the EU increased from €35 billion in 2019 to over €48 billion in 2023, with key exports including electronics, footwear, agricultural products, and seafood. Conversely, EU exports to Vietnam have also risen, encompassing high-tech products such as electrical machinery, vehicles, and pharmaceuticals.  

Foreign Direct Investment (FDI) Enhancements

The EVFTA has bolstered Vietnam’s attractiveness as an investment destination for European companies. The EU stands as one of the largest foreign investors in Vietnam, with a total FDI outward stock of €13.8 billion as of 2022. Investments are predominantly directed towards the industrial processing and manufacturing sectors, with notable interest in renewable energy projects.  

Institutional Reforms and Business Environment

In alignment with EVFTA commitments, Vietnam has undertaken significant institutional reforms to create a more transparent and favorable business environment. These reforms include amendments to laws related to insurance, intellectual property, public procurement, commerce, and investment. Such measures aim to facilitate smoother trade operations and attract higher-quality investments from the EU.  

Sustainable Development and Compliance Concerns

Despite the positive economic outcomes, concerns have been raised regarding Vietnam’s adherence to the EVFTA’s sustainable development provisions. In February 2025, several organizations lodged a complaint with the European Commission, alleging that Vietnam’s suppression of individuals and organizations working on sustainable development issues constitutes a breach of the EVFTA. The complaint emphasizes the need for Vietnam to uphold its commitments to human rights, labor rights, and environmental protection as stipulated in the agreement.  

Outlook

The EVFTA continues to serve as a cornerstone of EU-Vietnam economic relations, promoting increased trade and investment flows. While economic indicators reflect positive trends, ongoing attention to compliance with sustainable development commitments remains crucial to ensuring the agreement’s long-term success and mutual benefits.

Keywords: EVFTA, EU-Vietnam trade, tariff elimination, foreign direct investment, institutional reforms, sustainable development, compliance.

Sources for Further Reading