With the recent signing of the free trade agreement between the European Union and Vietnam (the EVFTA), OI’s first duty-free orders from Vietnam have been shipped to Germany.

Talks between the EU and Vietnam concerning the EVFTA began in 2010. However, the finalised agreement was only “concluded” by the European Council in March this year, and it went into effect in August.

“We are very happy that some OI customers are already able to fully benefit under the EVFTA. However, the agreement does not mean that all of our future exports to Europe will be entirely duty free,” says Sven Bittner, Chief Representative for Melcosa Vietnam, an OI joint venture.

This because only garments made from fabrics produced in Vietnam and South Korea (who also have an FTA with the EU) are eligible for exemptions. On top of this, while some apparel products are immediately exempt, duties on other apparel product categories will decrease incrementally over the next seven years.

On the whole, the EVFTA is fantastic news for the Vietnam team. As Sven says, “we have been talking about this agreement for years with our customers, and it is a real milestone for our business development in Vietnam.”