More than two years of negotiations yielded an FTA that will eventually see tariffs eliminated on most goods traded between the EU and Vietnam, which had more than 28 billion euros in trade in 2014.
The European Union and Vietnam this week agreed a long-negotiated 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 EU, according to statistics provided by the EU.
Key export items from Vietnam to the EU 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 EU.
“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 that 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 eliminate 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 agreed to liberalize trade in financial services, telecommunications, transport, and postal and courier services. On investment, Vietnam will open its market to the EU, for instance by removing or easing limitations on the manufacturing of food products and beverages, as well as in the non-food sectors.”
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 negotiations.
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 EU also has an FTA with South Korea, and is currently negotiating such deals with Japan and Malaysia as well.
European Union, Vietnam ink Free Trade Agreement
