As of 2024, Vietnam has 16 active free trade agreements (FTAs), offering substantial benefits such as exemptions or reductions of export/import taxes of up to 100% in major international markets like the UK, Europe, and Southeast Asia.

FDI Enterprises benefit from free trade agreements

FDI enterprises investing in Vietnam enjoy significant advantages from active FTAs, including up to 100% exemption or reduction of export/import taxes, simplified customs procedures, and easier access to large markets such as Europe and ASEAN. These agreements not only help FDI enterprises reduce procedures, costs, and clearance times but also enhance the competitiveness of their products in international markets.

Additionally, mutual recognition of technical standards, quality testing, and product standards among FTA members accelerates import and export processes, facilitating the production and business activities of enterprises.

Key Vietnam’s free trade agreement

Vietnam-EU Free Trade Agreement (EVFTA)

The EVFTA, effective from August 1, 2020, offers significant opportunities for Vietnamese businesses in collaboration with 27 EU member states. The agreement eliminates or reduces import taxes on up to 99% of tariff lines over a ten-year period, increasing the competitiveness of Vietnam’s key export products such as textiles, footwear, and seafood in the European market. Besides, imports from the EU, such as machinery, industrial equipment, and pharmaceuticals, also benefit from tax reductions, helping FDI enterprises in Vietnam optimize costs and expand production efficiently.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

CPTPP is a trade agreement between 11 countries, including Vietnam, Australia, Brunei, Japan, Malaysia, Canada, Chile, Mexico, New Zealand, Peru, and Singapore. Since its enforcement in Vietnam on January 14, 2019, 65.8% of tariff lines have been reduced to 0%, increasing to 86.5% in year four and reaching 97.8% by year eleven. This has significantly benefited Vietnam’s exports, such as textiles, footwear, seafood, furniture, and electronics, by granting them greater access to CPTPP markets. Conversely, Vietnamese businesses can easily import textile materials, chemicals, machinery, and high-tech equipment from member countries without facing tariff barriers.

ASEAN Trade in Goods Agreement (AFTA)

In effect since 1993, AFTA established a free trade area among the ten ASEAN countries: Vietnam, Singapore, Thailand, Malaysia, Cambodia, Indonesia, Laos, Brunei, Myanmar, and the Philippines. By reducing import tariffs to just 0-5% on most goods, AFTA has created a level playing field, facilitating the flow of goods within the region. This has allowed products such as consumer goods, agricultural products, electronics, automotive parts, and processed foods to circulate more easily, enhancing economic cooperation and development. FDI enterprises operating in Vietnam can leverage these benefits to optimize costs, expand market access, and increase competitiveness in the ASEAN market.

Vietnam-UK Free Trade Agreement (UKVFTA)

The UKVFTA represents a major milestone in trade relations between Vietnam and the United Kingdom, effective on January 1, 2021, shortly after Brexit (UK’s exit from the European Union). The agreement inherited commitments from the EVFTA, providing significant benefits to FDI enterprises in Vietnam. The UK will eliminate import tariffs on 99% of tariff lines within six years, offering Vietnamese goods lower-cost access to the UK market. This enhances competitiveness and fosters stronger bilateral economic cooperation.

Overview of Ongoing FTAs in Vietnam

Vietnam currently has sixteen active FTAs, providing numerous opportunities for FDI businesses. These agreements facilitate easier access to international markets and enable companies to take full advantage of tariff incentives.

STT	FTA Name	Status	Members
1	AFTA	Active since 1993	ASEAN
2	ACFTA	Active since 2003	ASEAN, China
3	AKFTA	Active since 2007	ASEAN, South Korea
4	AJCEP	Active since 2008	ASEAN, Japan
5	VJEPA	Active since 2009	Vietnam, Japan
6	AIFTA	Active since 2010	ASEAN, India
7	AANZFTA	Active since 2010	ASEAN, Australia, New Zealand
8	VCFTA	Active since 2014	Vietnam, Chile
9	VKFTA	Active since 2015	Vietnam, South Korea
10	VN-EAEU FTA	Active since 2016	Vietnam, Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan
11	CPTPP	Active since January 14, 2019	Vietnam, Canada, Mexico, Peru, Chile, New Zealand, Australia, Japan, Singapore, Brunei, Malaysia, and the UK
12	AHKFTA	Active since February 12, 2021	ASEAN, Hong Kong (China)
13	EVFTA	Active since August 1, 2020	Vietnam, EU
14	UKVFTA	Active since May 1, 2021	Vietnam, UK
15	RCEP	Active since January 1, 2022	ASEAN, China, South Korea, Australia, Japan, New Zealand
16	VIFTA	Signed on July 25, 2023	Vietnam, Israel

FTAs in Negotiations

Vietnam-EFTA
- Negotiations began in May 2012
- Members: Vietnam, Switzerland, Norway, Iceland, and Liechtenstein
ASEAN-Canada FTA
- Negotiations restarted in November 2021
- Members: ASEAN and Canada
Vietnam-UAE FTA
- Negotiations are in the initiation phase
- Members: Vietnam and the United Arab Emirates