The EU–Vietnam Free Trade Agreement (EVFTA) has been in effect since August 1, 2020, and by 2025, it will be entering its fifth year of implementation. After five years, EVFTA is considered to have played a crucial role in Vietnam’s international economic integration, expanding export markets, attracting investment, and promoting institutional reforms.

Vietnam has proactively and fully implemented its EVFTA commitments, while also working with the EU to establish mechanisms such as the Trade Committee and subcommittees on sustainable development and the rule of law to monitor the agreement’s implementation. Both sides have agreed to cooperate in resolving outstanding issues to ensure comprehensive implementation of EVFTA.

Meanwhile, the EU–Vietnam Investment Protection Agreement (EVIPA), though ratified by the European Parliament and Vietnam’s National Assembly in 2020, has yet to come into force due to the requirement for ratification by all EU member states. As of mid-2024, 18 out of 27 EU countries have ratified EVIPA, while 9 countries (including Germany, France, the Netherlands, Belgium, Poland, Austria, Ireland, Cyprus, and Slovenia) have yet to do so.

Vietnam has repeatedly called on EU countries to expedite the ratification of this agreement. Notably, in January 2025, Poland announced it had begun the ratification process of EVIPA—a move that Vietnam’s Minister of Industry and Trade hailed as "good news" and hoped would create a breakthrough in promoting investment relations between the two countries after the agreement is adopted. The European Commission has also confirmed it is urging the remaining member states to ratify EVIPA, considering it a necessary step to increase investment flows and protect European investors in Vietnam.

Vietnam–EU Trade and Investment Results (2024–2025)

In 2024, Vietnam–EU trade relations made significant progress, with bilateral trade reaching approximately USD 68–68.8 billion, a 16% increase compared to 2023. Of this, Vietnam’s exports to the EU reached around USD 52 billion (up over 18% year-on-year), while imports from the EU totaled about USD 16–17 billion (up over 11%). With export growth outpacing imports, Vietnam maintained a large trade surplus with the EU—estimated at around USD 35.2–35.4 billion in 2024.

The share of exports to the EU also gradually increased, accounting for 13.19% of Vietnam’s total exports in 2024. The EU has now become Vietnam’s fourth-largest trading partner and third-largest export market (after the US and China). Notably, in just the first two months of 2025, Vietnam’s export turnover to the EU reached USD 8.8 billion—up 13.3% year-on-year—temporarily making the EU Vietnam’s second-largest export market during this period, surpassing China.

In terms of investment, the EU remains one of Vietnam’s top foreign investors. By the end of 2024, EU enterprises had over 2,600 valid projects in Vietnam, with total registered capital exceeding USD 30 billion, ranking the EU as the fifth-largest investor in the country. EU investment focuses on various sectors, especially high-tech manufacturing, renewable energy, and green-oriented industries.

Thanks to the increasingly transparent business environment after EVFTA, FDI from the EU has shown signs of recovery: the proportion of EU capital in Vietnam’s annual FDI rose from an average of ~5% during 2016–2020 to 9.2% in 2023. However, research agencies also pointed out that actual EU FDI inflows have not increased as strongly as expected, due to procedural barriers and insufficient integration with domestic supply chains.

Policy Adjustments and Recommendations for 2025

• The implementation of EVFTA has been accompanied by Vietnam’s efforts to adjust policies to meet high standards and maximize the agreement’s benefits. EVFTA has driven Vietnam to continuously review and improve its legal and institutional frameworks to ensure full and effective implementation of its commitments.

• Many positive changes have been recorded in customs procedure transparency, business environment improvement, labor standards, and environmental protection. For example, thanks to EVFTA, tariffs have been significantly reduced, and Vietnamese businesses have increasingly taken advantage of preferences: the rate of utilizing EVFTA tariff preferences rose from 14.8% in 2020 to 35.2% in 2023.

• However, implementation still faces numerous challenges—such as uneven enforcement capacity among ministries and localities, and difficulties in aligning sector-specific legal frameworks with international norms. Experts recommend that Vietnam continue institutional reforms, improve transparency and governance effectiveness, and support domestic enterprises in enhancing competitiveness and adapting to EU standards.

• On the EU side, European partners have also made several proposals to cooperate and support Vietnam in implementing the agreement. At the recent Vietnam–EU Joint Committee meeting, Vietnam proposed that the EU help remove regulatory barriers to facilitate better EVFTA implementation, acknowledged Vietnam’s efforts to combat IUU (illegal, unreported, and unregulated) fishing, and urged the EU to lift the IUU "yellow card" on Vietnam’s seafood exports. Vietnam also called on the EU to provide financial, technological, and human resource training support for implementing the Just Energy Transition Partnership (JETP), helping the country reach net-zero emissions by 2050.

• The EU affirmed its strong support for Vietnam’s sustainable development goals and expressed readiness to continue supporting effective implementation of the JETP and initiatives on clean technology, digital transformation, and green energy. Meanwhile, the European business community in Vietnam (EuroCham) has contributed various policy recommendations to optimize EVFTA. The EuroCham Whitebook 2025 emphasizes the need for administrative reform and digital transformation to build a green, sustainable economy.

• Specifically, EuroCham recommends that Vietnam accelerate digitalization of customs processes and the issuance of certificates of origin (C/O EUR.1) to help businesses overcome obstacles in utilizing EVFTA tariff preferences. The report also proposes solutions to expedite pharmaceutical licensing processes, promote investment in logistics infrastructure development, and expand public–private partnerships to strengthen supply chain capacity and meet rising bilateral trade demand.

Assessments from Government and Business Representatives

Leaders and authorities from both sides have highly appreciated the positive changes brought about by EVFTA and EVIPA and reaffirmed their commitment to deepening the partnership. European Commission Vice President Josep Borrell noted that EVFTA has led to significant growth in two-way trade but acknowledged the slow pace of EVIPA ratification in some EU countries.

He emphasized that EVIPA is a key agreement to strengthen investment relations and protect European investments in Vietnam. Therefore, the EU is actively encouraging member states to complete the ratification process. On Vietnam’s side, Minister of Industry and Trade Nguyễn Hồng Diên welcomed Poland’s move to ratify EVIPA, calling it a positive signal showing that EU countries increasingly value investment cooperation with Vietnam. He stated that once the investment agreement is passed, “it will create a dual and breakthrough impact, fostering investment ties between the two countries (Vietnam and Poland).”

The European business community in Vietnam has also expressed optimism about the prospects for bilateral economic cooperation. EuroCham Chairman Bruno Jaspaert emphasized that Vietnam’s economic stability, growth potential, and adaptability are increasingly attracting interest from EU businesses.

EuroCham assessed that EVFTA, after five years of implementation, has brought many positive results and enhanced Vietnam’s appeal to European investors. However, EuroCham representatives also noted that to fully realize EVFTA’s potential, Vietnam must continue reform efforts, simplify procedures, and improve competitiveness. Policy improvements—as outlined in the 2025 Whitebook—will help businesses from both sides better seize the opportunities brought by EVFTA and EVIPA.

References: EVFTA, EVIPA – Ministry of Industry and Trade, CIEM, EuroCham, VCCI, General Statistics Office, Vietnamese Press, EU Commission.