EU-Vietnam trade pact presented for signature and conclusion
The European Commission has adopted the EU-Vietnam trade and investment agreements (EVFTA), paving the way for their signature and conclusion.
Finalised in December 2015, the pact is the most ambitious ever concluded between the EU and a developing country. It will eventually eliminate virtually all tariffs on goods traded between the two sides.
The agreement also includes a legally binding commitment to sustainable development, including the respect of human rights, labour rights, environmental protection and the fight against climate change, with an explicit reference to the Paris Agreement.
A legal review of the document was completed alongside discussions on an Investment Protection Agreement (IPA) in June.
"The trade and investment agreements with Vietnam are exemplary of Europe's trade policy. They bring unprecedented advantages and benefits for European and Vietnamese companies, workers and consumers," says President of the European Commission Jean-Claude Juncker. "They take fully into account the economic differences between the two sides. They promote a rules- and values-based trade policy with strong and clear commitments on sustainable development and human rights."
"I now expect the European Parliament and EU Member States to do the necessary for the agreements to enter into force as soon as possible," he adds.
Vietnam has become the EU's second biggest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade worth EUR47.6bn in 2017.
The country's key export items to the EU include telecommunications equipment, clothing, and food products. The EVFTA is expected to expand Vietnam's textile and apparel exports to the EU market even further.
The trade agreement sees the removal of more than 99% of tariffs on goods traded between the two economies. Vietnam will remove 65% of import duties on EU exports from entry into force of the agreement, with the remainder of duties being gradually eliminated over a ten-year period, to take into account that Vietnam is a developing country.
In addition, through the agreement, EU companies will be able to participate on an equal footing with domestic companies in bids for procurement tenders with Vietnamese authorities and state-owned enterprises.
Besides offering significant economic opportunities, the trade agreement also ensures that trade, investment and sustainable development go hand-in-hand, by setting the highest standards of labour, safety, environmental and consumer protection, ensuring that there is no 'race to the bottom' to attract trade and investment, says the Commission.
The agreement commits the two parties to respect and effectively implement the principles of the International Labour Organisation (ILO) concerning fundamental rights at work; and to implement international environmental agreements, such as the Paris Agreement; to act in favour of the conservation and sustainable management of wildlife, biodiversity, forestry and fisheries; and to involve civil society in the monitoring the implementation of these commitments by both sides. The trade agreement includes an institutional and legal link to the EU-Vietnam Partnership and Cooperation Agreement, allowing appropriate action in the case of breaches of human rights. The investment protection agreement, meanwhile, includes modern rules on investment protection enforceable through the new Investment Court System and ensures that the right of the governments on both sides to regulate in the interest of their citizens is preserved. It will replace the bilateral investment agreements that 21 EU Members States currently have in place with Vietnam. Alongside the agreement recently reached with Singapore, the Commission says EVFTA will make further strides towards setting high standards and rules in the ASEAN region, helping to pave the way for a future region-to-region trade and investment agreement.
"The Commission has now delivered two valuable and progressive agreements with Vietnam that I am convinced the European Parliament and EU Member States can support," says Commissioner for Trade Cecilia Malmström. "Vietnam has massive potential for EU exporters and investors to do business, both now and in the future.
"Through our agreements, we also help spread European high standards and create possibilities for in-depth discussions on human rights and the protection of citizens. I hope the Council and the European Parliament will approve the agreements swiftly to allow businesses, workers, farmers, and consumers to reap the benefits as soon as possible."
The Commission is now submitting to the European Council the proposals for signature and conclusion of both agreements. Once authorised by the Council, they will be signed and presented to the European Parliament for consent.
Upon the granting of this consent, the agreement can then be concluded by the Council and enter into force. The investment protection agreement with Vietnam will be ratified by Member States according to their respective internal procedures.