Vietnam formally ratified a free trade agreement with the European Union on Monday, Local media reported.

The agreement, which is expected to come into force in July, will cut or eliminate 99 per cent of import and export fees for goods

traded between the two sides, helping Vietnam’s exports to the EU market and boosting the country’s economy.

The agreement mainly covers the following aspects: trade in goods;Services, investment liberalization and e-commerce;

Government procurement;Intellectual property rights.

Other areas include rules of origin, customs and trade facilitation, sanitary and phytosanitary measures, technical barriers to trade

sustainable development, cooperation and capacity-building, and legal systems.The important parts are:

1. Almost complete elimination of tariff barriers: After the ENTRY into force of the FTA, the EU will immediately cancel the import tariff of about 85.6% of Vietnamese goods, and Vietnam will cancel the tariff of 48.5% of eu exports. The two-way export tariff of the two countries will be cancelled within 7 years and 10 years respectively.

2. Reduce non-tariff barriers: Vietnam will align more closely with international standards for motor vehicles and medicines.As a result, eu products will not require additional Vietnamese testing and certification procedures.Vietnam will also simplify and standardize customs procedures.

3. Eu access to Public procurement in Vietnam: EU companies will be able to compete for Vietnamese government contracts and vice versa.

4. Improve access to Vietnam’s services market: The FTA will make it easier for EU companies to operate in Vietnam’s postal, banking, insurance, environment and other services sectors.

5. Investment access and protection: Vietnam’s manufacturing sectors such as food, tires and building materials will be open to EU investment.The agreement establishes an investor-national court to resolve disputes between EU investors and Vietnamese authorities, and vice versa.

6. Promoting sustainable development: Free trade agreements include commitments to implement the core standards of the International Labour Organisation (for example, on the freedom to join independent trade unions, as there are currently no such unions in Viet Nam) and United Nations conventions (for example, on issues relating to combating climate change and protecting biodiversity).

At the same time, Vietnam will also become the EU’s first free trade agreement among developing countries, and lay the foundation for the import and export trade of southeast Asian countries.