EU, Vietnam Sign Free Trade Agreement
Eliminates Over 99 Percent of Tariffs on Goods Traded Between the Two Economies Over Seven Years
The European Union and Vietnam have signed the final document cementing an expansive free trade agreement deal that erases more than 99 percent of tariffs on goods traded between the two economies over a period of up to seven years.
The agreement – called “a new model for trade policy with developing countries” by EU Trade Commissioner Cecilia Malmström – is the first the EU has concluded with a developing country, follows two and a half years of intense negotiations between the 28-nation European Union and Vietnam, which had reached an agreement in principle last August.
Two-way trade between the two has tripled over the past decade to about $30 billion.
The roster of EU exports to Vietnam is topped by high-tech products including electrical machinery and equipment, aircraft, vehicles and pharmaceuticals. Vietnam reciprocates with mobile phones and other electronics, footwear, textiles, and agricultural products including coffee, rice and seafood.
News of the trade pact comes as Singapore’s trade and industry minister has called for a resumption of free trade talks between the European Union and the 10-nation Association of Southeast Asian Nations (ASEAN).
The EU and the ASEAN launched free trade talks in 2007, but they were abandoned two years later when the EU chose instead to conduct bilateral talks with its 10 individual member nations.
In addition to Vietnam, the Brussels-headquartered EU has forged a free trade accord with Asian trade partners South Korea, Papua New Guinea, and Fiji with deals between the EU and both Japan and the Philippines expected to be finalized by the end of this year.
Last November, the EU and Australia agreed “to start the process toward a comprehensive” free trade agreement. Bilateral discussions, the first stage of the negotiating process, are expected to begin within the next few months.