EU-Vietnam free trade deal gets green light in EP trade committee

The EP Committee on International Trade backed on Tuesday the free trade and investment protection agreements between the EU and Vietnam, the EP press service reported. The agreement will remove virtually all tariffs between the two parties in ten years. It will protect emblematic European products, and allow EU companies to access the Vietnamese public procurement market. The agreement is also an instrument to protect the environment and further social progress in Vietnam, including in labour rights

“This deal really is a win-win situation. In absolute terms Vietnamese exports of goods and services to the EU will increase by €15bn while EU exports to Vietnam augment by €8.3bn by 2035. With the consent to this trade deal with Vietnam, the trade committee is giving a positive signal to the ASEAN region and the rest of the world at a time when trade tensions are rising. The ratification will strengthen further progress on labour and environmental standards and the respect for human rights,” rapporteur Geert Bourgeois (ECR, BE).

According to the deal, 65% of EU exports to Vietnam will be immediately duty free, with the rest - including motorcycles, cars, pharmaceuticals, chemicals, wines, chicken and pork - gradually liberalised over ten years. 71% of Vietnamese exports to the EU will be duty free on day one, with the rest catching up in seven years. Duty-free Vietnamese exports of sensitive agricultural products, such as rice, garlic or eggs, will be limited.

Furthermore, non-tariff barriers will be eliminated in the automotive sector, export and import licensing, and customs procedures. Vietnam accepted the “Made in EU” marking, beyond national markings of origin, for non-agricultural products. Up to 169 emblematic EU products such as Parmigiano Reggiano cheese, Champagne, or Rioja wine, will enjoy protection in Vietnam, as will 39 Vietnamese products in the EU.

EU companies will have improved access to business, environmental, postal and courier, banking, insurance and maritime transport services in Vietnam. EU firms will be able to bid for contracts with Vietnamese ministries, state-owned enterprises, as well as with Hanoi and Ho Chi Minh City. And last but not least, there are legally-binding rules on climate, labour and human rights as the agreement commits Vietnam to apply the Paris Agreement.

Separately, the trade committee also agreed to an investment protection agreement providing an investment court system with independent judges to settle disputes between investors and state. The accompanying resolution passed by 27 votes for, seven against and five abstentions. Parliament is set to vote on the trade deal and the investment protection agreement at its February plenary session in Strasbourg.

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