Brussels, 21/08/2015 (Agence Europe) - In early August, Vietnam and the European Union reached agreement in principle on signing a free-trade agreement (FTA).
“We have agreed on all issues of substance. We will now finalise legislative text in the autumn so that we can formally close the negotiations”, said EU Trade Commissioner Cecilia Malmström on Tuesday 4 August, following a telephone conversation with Vietnamese industry and trade minister Vu Huy Hoang.
The agreement is the first of its type to be reached by the EU with a developing country, and now needs to be formally endorsed by the Council of the EU and the European Parliament.
Convinced that the terms of the agreement will be mutually beneficial to both sides, the commissioner gave an outline of the agreement. It will scrap virtually all tariff barriers and export duty (99% over ten years in Vietnam and seven years in Europe); - provide better access to the EU market for Vietnamese farm products, with quotas maintained for products such as rice and tinned tuna; - open up Vietnam's car market, network industries (such as telecoms, transport and postal services), financial services, food and government contracts; - open up the European market to Vietnamese textiles, with the removal of customs duties over five to seven years balanced by the introduction of safeguards to prevent the indirect import of Chinese textile products; - ease rules governing agri-food production by European companies in Vietnam; - improve protection in Vietnam for geographical indications (GI) for key EU farm products and Vietnamese GI will be recognised within the EU (for example Môc Châu tea and Buôn Ma Thuôt coffee).
The conclusion of the free-trade deal will not be at the expense of the environment, people's rights, respect of wildlife and biodiversity, explained the commissioner. Commitments will cover important rules and the ILO's conventions granting workers on both sides fundamental rights, explains the Commission in a press release. It adds that the agreement will contain a legally binding link with the Partnership and Cooperation Agreement governing wider relations between the EU and Vietnam to ensure that human rights, democracy and the rule of law are key pillars of EU-Vietnam trade.
Malmström says the deal is a milestone in ASEAN relations, following the trade agreement signed in 2014 between the EU and Singapore. She said the aim was to work towards an overarching agreement between the EU and ASEAN.
In 2014, the EU was Vietnam's second biggest trading partner (not including ASEAN) following China and accounted for 10% of the country's trade, to the tune of €28.2 billion: €22.1 billion of Vietnamese exports to the EU and €6.2 billion of EU exports to Vietnam). The main products exported from Vietnam to the EU include telephones, electronic goods, footwear, textiles and clothing, coffee, rice, seafood and furniture. The EU exports mainly high-technology products to Vietnam, including machinery and electrical equipment, aircraft, vehicles and pharmaceutical products.
In 2013, Europe made more than €500 million in foreign direct investment in Vietnam. Since 2013, the country moved ahead of Indonesia to become the EU's fourth biggest trading partner among the ten ASEAN nations. (Mathieu Bion)