The EU’s free trade agreement with Vietnam entered into force on Saturday. Customs duties on EU export goods such as pharmaceuticals, chemicals or machines are no longer applicable, as the EU Commission announced. Over the next ten years, there will be easing of trade restrictions for many other goods. In the end, 99 percent of the EU’s exchange with the Southeast Asian country is said to be duty-free.
EU Commission President Ursula von der Leyen said she hoped this would create jobs and “new emerging markets” for European companies. The agreement also offers a great opportunity for the people of Vietnam. “The agreement (…) holds considerable economic potential that will help build up after the Corona crisis,” said Trade Commissioner Phil Hogan.
Vietnam is an important country for the production of electrical appliances and textiles for the European market. Coffee, rice, seafood and furniture are also often sold to Europe. Conversely, the country with its 95 million inhabitants is an interesting market for European companies. They mainly sell machines, aircraft, vehicles and pharmaceuticals.
According to the Commission, the agreement is the most comprehensive EU trade agreement with a developing country. To take this into account, the ten-year transition period applies to tariff reduction. The surcharges for beef and olive oil are said to disappear after three years. The agreement provides for a maximum period of five years for tariffs on dairy products, fruit and vegetables.
The removal of “regulatory obstacles” is planned for the important export of cars in Europe. Vietnam has also pledged to protect 169 traditional European foods and beverages, including Roquefort cheese, port and sherry, and Parma ham, from being counterfeited. Both sides have committed to high standards for occupational, environmental and consumer protection, the Commission said.
The EU’s trade in goods with Vietnam amounted to 45.5 billion euros in 2019. It is the EU’s second largest trading partner in the Association of Southeast Asian Nations (Asean) after Singapore. Any part of the contract on investment protection drawn up separately from the trade agreement must also be ratified by the national parliaments of the EU countries.