Six years of EVFTA reshape Vietnam-EU trade ties

The European Union and Vietnam on August 1 marked six years since the agreement entered into force, transforming the economic corridor between the two sides from political commitment into high-value commercial integration.

Bruno Jaspaert, chairman of EuroCham, said, "Nearly half of the three decades of EU-Vietnam trade has taken place under the EVFTA, showing how quickly commercial integration accelerates once barriers begin to lift. Six years ago, it was an ambitious political commitment. Today, its impact is measurable: it has reshaped trade flows, deepened business confidence, and established Vietnam as one of Europe's most vital economic anchors in Asia."

"Having supported the framework from negotiation to implementation, EuroCham marks this milestone to celebrate how trade diplomacy delivers tangible economic value. As the primary voice of European business in Vietnam, we will continue to drive growth through evidence-based advocacy and constructive public-private dialogue," he added.

As shown in Vietnam’s Customs Department and the National Statistics Office, cumulative bilateral trade between Vietnam and the EU reached $900 billion between 1995 and 2026. $383.8 billion, or 42.6 per cent of that three-decade total, was generated in just the six years following the EVFTA's implementation in August 2020.

Official first-half 2026 figures show bilateral trade reaching $41.4 billion, driven by $31.8 billion in Vietnamese exports against $9.7 billion in European imports, yielding a first-half trade surplus of $22 billion for Vietnam, a six-month surplus that exceeds the full-year surplus of $21.7 billion recorded in 2019 before the agreement took effect.

EuroCham vice-chair Jean-Jacques Bouflet, who served as one of the EU's lead negotiators during the EVFTA talks, highlighted the partnership's long-term impact.

"While Vietnam maintains a substantial trade surplus with the EU, this should not be viewed through a zero-sum lens. European exports of advanced technology, machinery, and pharmaceuticals directly elevate Vietnam's industrial productivity. In return, Vietnam's strengths in electronics, machinery, textiles, footwear, furniture, and agricultural products reinforce European supply chains," he said. "The EVFTA has established a complementary economic relationship where both sides build competitiveness around their structural strengths. We encourage Vietnam to expand imports of high-value European technologies to support its industrial upgrading. Today, the EU accounts for around 12 per cent of Vietnam's global exports, yet only 4 per cent of its total imports. Increasing high-value imports from Europe would create a more balanced trade relationship and strengthen Vietnam's long-term competitiveness."

Photo: EuroCham

Photo: EuroCham

Six years on, the commercial value of the EVFTA is evident in how deeply European businesses are integrating its provisions into their core operations. According to EuroCham's second-quarter 2026 Business Confidence Index, 55 per cent of surveyed European enterprises now regard Vietnam as a core operational base or major growth location, while a further 22 per cent identify it as an important part of their regional footprint. Vietnam has matured into a competitive regional platform for long-term expansion across Asia.

Among European enterprises in Vietnam actively engaged in bilateral trade, half directly benefit from EVFTA tariff preferences. Furthermore, 33 per cent apply preferential rates to at least one-fifth of their trade volume, and nearly 20 per cent apply them to more than half of their trade flows.

"Unlike earlier generations of free trade agreements, the EVFTA extends well beyond tariff reductions to encompass customs cooperation, technical standards, intellectual property, sustainable development, and regulatory transparency," Bouflet said. "As environmental standards, product traceability requirements, and due diligence expectations continue to evolve, particularly under the European Green Deal, the Carbon Border Adjustment Mechanism, and the EU Deforestation Regulation, a company's ability to understand and implement these requirements will become an increasingly important determinant of competitiveness."

Photo: EuroCham

While merchandise trade has accelerated rapidly, European foreign direct investment has expanded at a more gradual pace. European investors continue to place a high premium on regulatory predictability, administrative efficiency, and robust legal protection mechanisms when allocating long-term capital.

This dynamic underscores why full ratification of the EU-Vietnam Investment Protection Agreement (EVIPA) by all EU member states remains a strategic priority. Where the EVFTA liberalised product trade, the EVIPA will establish formal legal certainty and modern dispute settlement mechanisms, creating a stable foundation for high-quality European capital across clean energy, digital infrastructure, and advanced manufacturing.

As the EVFTA enters its seventh year, the agreement reaches a significant tariff milestone: the EU completes its liberalisation schedule, granting duty-free access to 99 per cent of Vietnamese exports. The majority of Vietnamese exports already enter the EU under around 80 per cent preferential rates, and this final tariff elimination opens maximum market access for Vietnamese producers.

Meanwhile, Vietnam will continue its phased tariff reductions on EU imports over the next four years, with its commitments concluding in 2030.

"Following the elevation of EU-Vietnam relations to a Comprehensive Strategic Partnership in January 2026, the EVFTA stands as the bedrock of a fundamentally new era of economic diplomacy. Its legacy is not measured by trade volumes alone, but by the precedent it sets," Jaspaert said. "By proving that a high-ambition trade agreement between Europe and an emerging Asian economy can deliver tangible growth, the EVFTA offers a powerful reference model for regional and transnational partnerships. Vietnam is actively paving the way for deeper EU-ASEAN bloc-to-bloc cooperation, fostering the confidence needed between partners who see each other not merely as trade destinations, but as indispensable collaborators in an uncertain global economy."