The Vietnam-Australia Free Trade Agreement (VAFTA) is a landmark deal signed between the two nations in 2015 that has paved the way for greater economic cooperation and trade between the two countries. The agreement was implemented on 1 January 2020 and is expected to bring tangible benefits to businesses and consumers in both Vietnam and Australia.
Under the VAFTA, Vietnam and Australia have agreed to remove tariffs on a wide range of goods and services, including textiles, agriculture, and seafood. This will make it easier and cheaper for businesses in both countries to trade with each other, opening up new markets and opportunities.
One of the key benefits of the VAFTA is that it will help to diversify Vietnam`s export market. In recent years, Vietnam has heavily relied on exports to the United States and Europe. However, the VAFTA will give Vietnamese businesses greater access to the Australian market, which is estimated to be worth around $US10.5 billion.
The VAFTA is also expected to boost investment between the two countries. Australian businesses will now have greater opportunities to invest in Vietnam, particularly in sectors such as education, infrastructure, and healthcare. Similarly, Vietnamese businesses will be able to invest more easily in Australia, particularly in areas such as IT, tourism, and agriculture.
The VAFTA has also been hailed as a win for consumers. By removing barriers to trade, the VAFTA is expected to lead to lower prices for goods and services in both countries. This will benefit consumers in Vietnam and Australia, who will have access to a wider range of products at lower prices.
However, as with any free trade agreement, there are also concerns about the impact of the VAFTA on certain sectors. In particular, some are worried that the removal of tariffs on agricultural products could lead to an influx of cheaper Australian products, putting Vietnamese farmers at a disadvantage. Similarly, some Australian businesses may be worried about increased competition from Vietnamese companies.
Overall, the VAFTA represents a significant step forward in the economic relationship between Vietnam and Australia. By removing barriers to trade and investment, the agreement is expected to bring tangible benefits to businesses and consumers in both countries. However, as with any agreement of this kind, there are potential challenges and it will be important for both sides to work together to ensure that the benefits are shared fairly.