08:29 | 16/07/2018 Cooperation
(VEN) - At a recent meeting in Brussels, EU Commissioner for Trade Cecilia Malmstrom and Vietnamese Minister of Industry and Trade Tran Tuan Anh reached a consensus on the final text of the EU-Vietnam Free Trade Agreement (EVFTA), formally concluding the legal review of the document.
However, the EU has changed its regulations on the process of approving FTAs, with contents related to investment protection and investor-state dispute settlement separated into a deal known as the Investment Protection Agreement (IPA).
The EU commissioner for trade and the Vietnamese minister of industry and trade also reached an agreement on all the contents of the IPA, and agreed to submit the two agreements to relevant authorities as soon as possible to enable their signing and ratification in the near future.
Commissioner for Trade Cecilia Malmstrom said, “The agreement is a great opportunity for European exporters. Vietnam is one of the fastest growing countries in Southeast Asia, a market with significant potential for the EU’s agricultural, industrial and services exports. Having concluded the legal review, we now hope to conclude the trade agreements swiftly to allow EU firms, workers, farmers and consumers to reap the benefits as soon as possible.
Vietnam is a good example of a developing country seizing the opportunities of open global trade, hand in hand with clear commitments to respect human rights and to comply with International Labor Organization conventions”. The trade agreement will eliminate nearly all tariffs (over 99 percent). Vietnam will liberalize 65 percent of import duties on EU exports to Vietnam once the FTA takes effect, with the remainder of duties being gradually eliminated over a 10-year period.
The agreement will also contain specific provisions to address non-tariff barriers in the automotive sector, and will provide protection for traditional European food and drink products, like Rioja or Roquefort, in Vietnam. Through the agreement, EU firms will also be allowed to bid for public contracts with Vietnamese authorities and state-owned enterprises.
Alongside a recently agreed deal with Singapore, this agreement will make further strides towards setting high standards and rules in the ASEAN region, helping to pave the way for a future region-to-region trade and investment agreement.
Along with significant economic opportunities, the trade agreement also includes a comprehensive chapter on trade and sustainable development. It sets high standards of labor, safety, environmental and consumer protection, as well as strengthening joint actions on sustainable development and climate change and fully safeguarding public services. Data from the Vietnamese Ministry of Industry and Trade show that the EU currently is Vietnam’s third largest trading partner and second largest export market. Bilateral trade grew more than 12 times, from US$4.1 billion in 2000 to over US$50.4 billion in 2017. Key Vietnamese exports to the EU include footwear, textiles, garments, coffee, wood products and seafood. The EU is also a major foreign investor in Vietnam.
By 2017, 24 out of 28 EU countries had invested in Vietnam through about 2,000 projects with total registered capital of more than US$21.5 billion. EU investments cover most major sectors of the Vietnamese economy and are concentrated in industry, construction and services.
According to the European Commission in Vietnam, once translated, the commission will make a proposal to the European Council for signature and conclusion of the agreements. After signature the council will send the agreements to the European Parliament.
In the meantime, the commission is continuing the necessary preparatory work to ensure the effective and timely implementation of the trade agreement, including commitments on animal and plant health (sanitary and phytosanitary issues) and labor issues.