After the Council of the EU adopted decisions on Tuesday 25 June on the signature of a Free Trade Agreement (FTA) and an Investment Protection Agreement (IPA) between the European Union and Vietnam, these agreements will be signed on Sunday 30 June in Hanoi (see EUROPE 12277/30).
After Singapore, Vietnam is the EU's second largest trading partner in the dynamic Association of Southeast Asian Nations (ASEAN). The agreement should eliminate almost all customs duties between the two entities (99%).
It also contains provisions on intellectual property protection, investment liberalisation and sustainable development (see EUROPE 12050/20).
Members of Parliament still worried
The free trade agreement, which is an exclusive power of the EU, only needs the green light from the Council of the EU and the European Parliament before it can enter into force.
However, the investment protection agreement, with so-called "shared" powers with the Member States, will have to be ratified in all Member States before it can enter into force.
While the Council of the EU and the Commission welcome the signing of another so-called "new generation" bilateral agreement, the most ambitious ever concluded with a developing country, some MEPs will be reluctant to ratify the free trade agreement. This is due to Hanoi's still mixed human and social rights record.
While the Indochinese government has made progress, according to some (see EUROPE 12264/1), in ratifying some International Labour Organization (ILO) conventions, others are still pending. Once the pressures of this ratification have disappeared, some MEPs fear that Hanoi will be less motivated to keep its commitments (see EUROPE 12264/19, 12152/25).
European industry pleased
As for European industry, it is pleased that this agreement, concluded in 2015 (see EUROPE 11444/17), is finally close to being implemented.
The Egmont Institute and the EU-Vietnam Business Hub organised a debate on Monday 24 June to identify ways to strengthen economic relations between the EU and Vietnam, highlighting the "immense" commercial potential and complementarity between the two partners in sectors as diverse as the automotive industry, industrial machine tools, waste water and waste treatment, the food sector, the pharmaceutical industry and textiles.
Thus, the Federation of the European Sporting Goods Industry (FESI) welcomes these developments and the "new opportunities for EU companies, in particular in the field of sporting goods". However, "aware of the concerns regarding labour rights and working conditions in Vietnam", FESI is also committed to working with its Vietnamese partners to "make sure that the Vietnamese workers effectively benefit from this agreement", said Jérôme Pero, FESI Secretary General, on 25 June.
65% of the duties on EU exports to Vietnam will disappear as soon as the FTA enters into force; the rest will be phased out over a period of up to 10 years. For Vietnamese exports to the EU, 71% of the duties will disappear upon entry into force, the rest being phased out over a period of up to 7 years. (Original version in French by Hermine Donceel)