The entry into force of TUEFTA comes amid growing global trade tensions with China. Combined with the ongoing COVID 19 pandemic, this has contributed to the growing trend of companies diversifying their supply chains, with Vietnam rapidly becoming the main beneficiary. The EU is already Vietnam`s second -largest destination for products. EMU will give new impetus to this important trade route and is an important step towards ending the security of EU investors and other global companies wishing to establish or develop trade relations between Vietnam and the EU, as well as the basis for creating fair and effective trading conditions. Under the EU, the EU provides the same thresholds as it applies under the WTO Public Procurement Agreement (GPA) and other free trade agreements, while Vietnam has a 15-year transitional period with higher thresholds. Both the EU and Vietnam are committed to opening up public procurement to the central government, sub-headquarters and other entities, as outlined in the annexes to the agreement. In particular, the EU is committed to opening the same central public bodies as in the WTO, with some exceptions. Vietnam is committed to opening up procurement processes for 20 central agencies, including several ministries, departments and agencies, two sub-central agencies (Hanoi City and Ho Chi Minh City) and 42 “other covered entities”, including Vietnam Railways and Vietnam Electricity2.2, illustrating the strength of EU-Vietnam relations and the opportunities Europe sees in the Southeast Asian country. The EU is achieving a long-term goal of increasing its influence and expansion in ASEAN markets by targeting Vietnam, and European entrepreneurs will have better access to one of the fastest growing Asian economies when the agreements come into force.
Despite the interruption of the coronavirus pandemic and the slowdown in the global economy, Vietnam is expected to continue to record economic growth of 4.8% this year, returning to 6.8% in 2021. In 2015, the EU and Vietnam agreed on the principle of a comprehensive and ambitious trade and investment agreement. This free trade agreement (FTA) is the second largest in the ASEAN region after Singapore and is another part of the EU`s ultimate goal of a free trade agreement between the EU and ASEAN. Infrastructure projects account for a significant share of public investment in Vietnam. The TFUE urges the parties to respect the general principles of national treatment, non-discrimination and increased transparency of public procurement. The aim is to ensure that EU companies can offer public procurement (goods, services and construction services with some exceptions) on an equal footing with national bidders, taking into account the monetary value thresholds set under the agreement. Nevertheless, TUEFTA authorizes Vietnam to delay the implementation of several specific provisions by ten years and Vietnam`s public procurement obligations are not enforced for five years. As part of the EUFVTA chapter on competition, Vietnam and the EU agree to maintain competition law and ensure that the relevant authorities apply these laws in a non-discriminatory and transparent manner. In order to remedy anti-competitive behaviour and promote procedural fairness, the agreement requires the parties not to enter into agreements that could restrict or distort the control or competition of a potential merger and acquisition.