EU-Vietnam trade deal a great opportunity for business

The European Parliament's International Trade Committee has today approved the EU-Vietnam free trade and investment protection agreement. Parliament rapporteur and ECR MEP Geert Bourgeois believes the trade deal will be a great opportunity for European exporters and investors.

Speaking after the vote, Bourgeois said: “By giving consent to this trade deal with Vietnam in the committee we give a positive signal to the ASEAN region and the rest of the world in times of rising trade tensions. Not only does this deal contain chapters related to economic sectors, we have a modern chapter on sustainable development that shows how these agreements can lift people out of poverty.

“This deal really is a win-win situation. In absolute terms Vietnamese exports of goods and services to the EU will increase by €15 billion while EU exports to Vietnam augment by €8.3 billion by 2035. As previous DG Trade studies indicate that each billion extra exports generate 14,000 jobs, you can roughly say that by 2035 the FTA will generate 116,200 EU jobs.

“It is also important to underline the strategic importance of this deal. Vietnam has a vibrant economy of more than 95 million consumers, a growing middle class and a young, dynamic workforce. It is a market with big opportunities for the export of agricultural products, industry and services in the EU.”

The text stipulates the abolishment of almost all customs duties between both parties with the bigger part as soon as the free trade agreement enters into force, and remaining duties to be phased out within 10 years. Also contained within the trade agreement are detailed rules for determining the origin of goods, such as the introduction of a “Made in EU” label for non-agricultural products and the protection of European geographical indications such as Roquefort cheese and Champagne. Only a few sensitive agricultural products will not be fully liberalised, but the EU has offered access to Vietnamese exports through tariff quotas (TRQs): rice, sweetcorn, garlic, mushrooms, sugar cassava starch, surimi and canned tuna.

The agreement will also open several Vietnamese production sectors for EU investments, such as food and drink, tires, ceramics and building materials. EU investors in Vietnam and Vietnamese investors in the EU will also receive the same legal treatment as their domestic counterparts. According to Bourgeois, the agreement will stimulate cooperation in the field of labour and human rights:

“The trade agreement with Vietnam will have a positive impact on the reform process in the country and offer progress in the field of labour and human rights through a clear commitment from the Vietnamese authorities.”

The Report will now need to be endorsed by the whole Parliament. A Joint debate and vote are scheduled for the February session in Strasbourg. ECR Rapporteur Geert Bourgeois has also organised a high-level conference on the EU-Vietnam free trade arrangement on 28th January from 17:30 - 19:30, room A5E3. With trade commissioner Phil Hogan as keynote speaker and high level speakers from Vietnam.

Background

1. The EU (12%) is one of Vietnam’s largest trading partners after China (23%) and almost on par with the US (13%) and South Korea (14%), while Vietnam is the 16th largest partner of the EU is in the world (the second largest in Southeast Asia after Singapore).
2. Vietnam exports electronic equipment (such as cell phones and computers) to the EU, along with shoes, clothing and plant products; The EU exports machines, cars and chemicals (including pharmaceutical products) to Vietnam.
3. The EU is not only an important trading partner for Vietnam, but also its largest non-Asian investor.