EU set to sign trade and investment agreements with Vietnam

The trade agreement will eliminate nearly all customs duties on goods traded between the two sides

Photo: EPA EU Commissioner for Trade Cecilia Malmstrom

The Council of Ministers today approved the EU-Vietnam trade and investment agreements, paving the way for their signature and conclusion at the end of the week. EU Commissioner for Trade Cecilia Malmstrom and Romanian Minister for Business, Trade and Entrepreneurship Stefan-Radu Oprea are now expected to sign the agreement on the EU's behalf in Hanoi on Sunday 30 June.

As stated by the Commission, the agreements are set to bring unprecedented benefits for European and Vietnamese companies, consumers and workers, while promoting respect for labour rights, environmental protection and the fight against climate change under the Paris Agreement.

In particular, the trade agreement will eliminate nearly all customs duties on goods traded between the two sides in a progressive way that fully respects Vietnam's development needs. It also contains specific provisions to remove technical obstacles, such as those in the car sector, and will ensure that 169 traditional European food and drink products recognised as Geographical Indications are protected in Vietnam. Thanks to the deal, EU companies will also be able to participate in bids for procurement tenders in Vietnam on an equal footing with domestic companies.

Besides offering significant economic opportunities, the EU and Vietnam have also agreed strong sustainable development measures. This includes a commitment to implement the Paris climate agreement effectively. The agreement on the matter establishes dedicated platforms for the EU and Vietnam to involve civil society in the implementation of these commitments.

"Vietnam is a vibrant and promising market of more than 95 million consumers and both sides have much to gain from stronger trade relations. Beyond the clear economic benefits, this deal also aims to strengthen respect for human rights as well as protecting the environment and workers' rights," Commissioner for Trade Cecilia Malmstrom said, with President of the European Commission Jean-Claude Juncker reminding that the agreements with Vietnam are the second to have been concluded between the EU and a Southeast Asian country and that they "represent stepping stones to a greater engagement between Europe and the region"

"It is also a political statement by two partners and friends standing together for open, fair and rules-based trade," Juncker continued.

Vietnam is the EU's second largest trading partner in the ASEAN region after Singapore, with trade worth €49.3bn for goods and over €3bn for services. While EU investment stock in Vietnam remains modest standing just at €6bn in 2017, an increasing number of European companies are establishing there to set up a hub to serve the Mekong region. Main EU imports from Vietnam include telecommunications equipment, footwear and textiles, furniture and agricultural products. The EU mainly exports to Vietnam goods such as machinery and transport equipment, chemicals and food and beverages.

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