EU-Vietnam trade pact edges closer to ratification
The EU-Vietnam trade agreement (EVFTA) is moving closer to ratification after the two sides formally concluded a legal review of the document and completed discussions on an Investment Protection Agreement (IPA).
The Commission will now translate the text of the trade agreement into the other 22 EU official languages and launch the legal review of the IPA text, paving the way towards the signature and conclusion of these two agreements.
Finalised in December 2015, the trade deal is the most ambitious ever concluded between the EU and a developing country. It will eventually see the removal of more than 99% of tariffs on goods traded between the two economies.
"The agreement is a great opportunity for European exporters," said Trade Commissioner Cecilia Malmström. "Vietnam is one of the fastest growing countries in South East Asia, a market with significant potential for the EU's agricultural, industrial and services exports.
"Having concluded the legal review, we now hope to conclude the trade agreements swiftly to allow EU firms, workers, farmers and consumers to reap the benefits as soon as possible."
Vietnam has become the EU's second biggest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore and ahead of Malaysia, with trade worth EUR47.6bn in 2017.
Vietnam's key export items to the EU include telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture.
In 2017, the EU imported EUR3.34bn worth of clothing from Vietnam, accounting for 9% of total clothing imports and up 5.7% on the previous year. Between 2014 and 2017, clothing shipments into the EU from Vietnam have jumped 42%.
The EVFTA is expected to expand Vietnam's textile and apparel exports to the EU market even further.
Specifically, EU import duties on textiles and apparel from Vietnam will be eliminated over a seven-year phase-out period once the agreement comes into force. Garments produced in Vietnam from fabrics made in South Korea or other ASEAN countries with which the EU has a free trade agreement will also qualify for duty-free treatment.
However, there are also capacity and labour concerns for Vietnam's apparel and textile industry once the EVFTA and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade pact, of which Vietnam is also a signatory, come into force.
Once the text of the EVFTA has been translated, the Commission will present it to the Council for signature and conclusion, before it heads to the European Parliament for ratification. The agreement is expected to come into force in 2018.