The European Union and Vietnam recently agreed to a free-trade agreement that will eventually see tariffs removed on nearly all goods transacted to and from the Southeast Asian nation.
Total trade between the European Union and Vietnam was 28.2 billion euros in 2014, including 22.1 billion euros in Vietnamese exports to the European Union, according to EU statistics.
Key export items from Vietnam to the European Union include telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture. EU exports to Vietnam are dominated by high-tech products including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products.
Total bilateral trade in services in 2013 amounted to a further 2.9 billion euros, with a slight surplus for the European Union.
“This finely balanced agreement will boost trade with one of Asia’s most dynamic economies,” EU Trade Commissioner Cecilia Malmström said in a statement. “It sets a new, better and modern model for free trade agreements between the EU and developing countries, and establishes a good standard for the trade relationship between the EU and South East Asia as a whole. Vietnam is a growing economy and once this agreement is up and running, it will provide significant new opportunities for companies on both sides, by increasing market access for goods and services.”
The European Commission said besides the elimination of tariffs, the deal calls on Vietnam to also remove most of its export duties. Vietnam agreed to liberalize 65 percent of import duties on EU exports from the day the deal takes effect, and gradually eliminating the rest over a 10-year period, according to reports from the BBC.
“The agreement will also create new market access opportunities in services and investment,” the EC statement said.
Vietnam has had a bilateral trade agreement with the United States since 2001 and both are members of the sweeping 12-nation Trans-Pacific Partnership, which is currently in the final stages of negotiation.
The EU-Vietnam deal is expected to take effect in late 2017 or early 2018, and is the second such deal the bloc of European nations has agreed with a Southeast Asian nation—it has a similar free trade deal with Singapore. The European Union also has an FTA with South Korea, and is currently negotiating such deals with Japan and Malaysia.
This column was published in the September 2015 issue of American Shipper.
EU, Vietnam ink FTA
