The EU-Vietnam FTA is expected to be activated in early 2018.

In anticipation of this, European companies have started to explore the Vietnamese market in fashion and various other categories.

Machinery and appliances account for just over half of Vietnam’s exports to the EU. Telecommunications equipment comprise 33.5 per cent of exports. Footwear and hats account for 12.1 per cent and textiles and textile articles 10.4 per cent. Vietnam’s imports from the EU include machinery and appliances (27.4 per cent of the total), chemicals (17.8 per cent) and manufactured goods (11.3 per cent).

Vietnam’s trade with the EU during the first 11 months of 2016 totaled 40.76 billion dollars. The bloc was Vietnam’s second-biggest export market valued at 30.72 billion dollars (up nine per cent over the same period of 2015 and accounting for 19.2 per cent of the total) and is its fourth-biggest source of imports.

The FTA will cut down the import tariff currently imposed by the EU on Vietnamese garments, which is now 12 per cent, to zero. The zero tariff will substantially enhance the competitiveness of Vietnamese garment exports and is likely to enhance sales by 20 per cent annually.

Vietnam’s exports of textile, clothing and footwear to the EU are expected to more than double in 2020 as a result of the FTA.