Minister Ștefan-Radu Oprea signed today, on behalf of the European Union, the Free Trade Agreement (FTA) and the Investment Protection Agreement (IPA) between EU and Vietnam. The ceremony took place in Hanoi, the capital of Vietnam.
Ștefan-Radu Oprea took part at the ceremony as acting President of the Foreign Affairs Council - Trade, along with Cecilia Malmström i, the EU Commsissioner for Trade. On behalf of Vietnam, the agreements were signed by Tran Tuan Anh, minister of Industry and Trade, and by Nguyen Chi Dung, minister of Planning and Investment.
“The signing of the agreements with Vietnam sends a strong message to other Asian partners on the EU commitment for promoting free trade, based on rules. These agreements bring unprecedented advantages and benefits for European and Vietnamese consumers, workers and companies”, said Ștefan-Radu Oprea.
The FTA between the EU and Vietnam is the most ambitious free trade deal ever concluded with a developing country. It provides for the almost complete (99%) elimination of customs duties between the two blocks. 65% of duties on EU exports to Vietnam will disappear as soon as the FTA enters into force, while the remainder will be phased out gradually over a period of up to 10 years. As regards Vietnamese exports to the EU, 71% of duties will disappear upon entry into force, the remainder being phased out over a period of up to 7 years.
The FTA will also reduce many of the existing non-tariff barriers to trade with Vietnam and open up Vietnamese services and public procurement markets to EU companies, while the IPA will strengthen protection of EU investments in the country.
As one of the “new generation” bilateral agreements, the EU-Vietnam trade deal also contains important provisions on intellectual property protection, investment liberalisation and sustainable development. On this last aspect, the FTA includes commitments to implement International Labour Organisation core standards (for instance on the freedom to join independent trade unions and on banning child labour) and UN conventions relating for example to the fight against climate change or the protection of biodiversity.
Negotiations between the EU and Vietnam started in June 2012 and were concluded in December 2015. On 25 June, 2019, the Council adopted decisions on the signature of two agreements.
The Romanian Presidency has made substantial efforts so that the Council can conclude all the procedures, so that the signing of both agreements can take place until the end of June 2019. As part of the half-year mandate, one of the main priorities of the Romanian Precedency has been the signing of the two agreements between EU and Vietnam.
Following the opinion of the European Court of Justice delivered in May 2017, the Commission decided to propose two separate agreements:
·a free trade agreement, which contains areas of exclusive EU competence and thus only requires the Council’s approval and the European Parliament’s consent before it can enter into force.
·an investment protection agreement which, due to its shared competence nature, will also have to go through the relevant national ratification procedures in all member states before it can enter into force. The time horizon for the implementation of this act is therefore expected to be much longer.
Vietnam is the EU’s second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth almost €50 billion a year and almost €4 billion when it comes to services. While EU investment stocks in Vietnam remain modest, standing at €8.3 billion in 2016, an increasing number of European companies are establishing there to set up a hub to serve the Mekong region. Main EU imports from Vietnam include telecommunications equipment, clothing and food products. The EU mainly exports to Vietnam goods such as machinery and transport equipment, chemicals and agricultural products.