Brussels (dpa) – The European Union and Vietnam have reached a
preliminary agreement on a free trade deal, a top EU official said
Tuesday, as hopes are high that it will bolster investments and jobs.
The agreement, which has been under negotiation for two and a half
years, will pave the way for the removal of “almost all” tariffs on
goods, EU Trade Commissioner Cecilia Malmstrom said.
“This finely balanced agreement will boost trade with one of Asia’s
most dynamic economies,” Malmstrom said. “Once this agreement is up
and running, it will provide significant new opportunities for
companies on both sides.”
The deal is the second between the EU and a South-East Asian country
after free trade negotiations with Singapore wrapped up last year.
Vietnam is the EU’s fourth-largest trading partner among the 10
members of the Association of South-East Asian Nations (ASEAN) while
the EU is Vietnam’s second-largest trading partner after China.
The 28-country EU ultimately hopes to have a single agreement with
all of ASEAN. Bilateral free trade negotiations are already under way
with Malaysia and Thailand.
The EU announced Tuesday that its top diplomat, Federica Mogherini,
will visit Malaysia this week as part of the bloc’s “drive to step up
its engagement with ASEAN.”
“Asia matters to Europe and vice versa,” Mogherini said ahead of her
visit Wednesday and Thursday. “We have a huge stake in each other’s
Malmstrom said that under the pact with Hanoi, Vietnam will remove
more than 99 per cent of its tariffs over a maximum of 10 years and
the EU will do the same within seven years.
She added that protections are foreseen for sensitive products
in Europe, such as rice and canned tuna while provisions have also
been put in place to prevent the free trade deal from being a conduit
for inexpensive Chinese fabrics that are used in Vietnamese garments.
Commitments to human rights are also part of the agreement with a
suspension of the pact possible in case of severe human rights
violations, Malmstrom said.
“There are of course violations of human rights in Vietnam,” she
said. “That is obvious, and we have been very open about that. Our
deal will … make sure that trade does not happen at the cost of the
environment or of people’s rights.”
The agreement is expected to be finalized by the end of the year,
including the issue of how investor lawsuits are handled, a sensitive
matter in the EU. The deal will then have to be ratified by the
bloc’s governments and the European Parliament.
Malmstrom predicted that “with speedy work,” the agreement could
enter into effect at the end of 2017 or start of 2018.
Last year, the trade in goods between the EU and Vietnam surpassed 28
billion euros (31 billion dollars), according to the European
Electronic products, footwear, textiles and clothing, coffee, rice,
seafood and furniture top the list of Vietnamese exports to the EU
while the European bloc exports mainly high-tech products to the
Asian country, ranging from aircraft to pharmaceuticals.