EU-Vietnam trade agreement enters into force
Vietnam - EU trade singing ceremony - Photo EC
(BRUSSELS) - EU exports to Vietnam will be taxed less as of 1 August, when the EU-Vietnam trade agreement enters into force, a deal that will ultimately scrap duties on 99 pre cent of all goods traded between the two sides.
Vietnam is the EU's second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth €45.5 billion in 2019 and trade in services of some €4 billion (2018).
Doing business in Vietnam will also become easier for European companies, who will now be able to invest and pitch for government contracts with equal chances to their local competitors.
Under the agreement, economic benefits go hand in hand with guarantees of respect for labour rights, environment protection and the Paris Agreement on climate, through strong, legally binding and enforceable provisions on sustainable development.
"The European economy needs now every opportunity to restore its strength after the crisis triggered by the coronavirus," said Commission president Ursula von der Leyen: "Trade agreements, such as the one becoming effective with Vietnam today, offer our companies a chance to access new emerging markets and create jobs for Europeans."
Trade Commissioner Phil Hogan added: "Vietnam is now part of a club of 77 countries doing trade with the EU under bilaterally agreed preferential conditions. The agreement strengthens EU economic links with the dynamic region of South-East Asia and has an important economic potential that will contribute to the recovery after the coronavirus crisis."
The EU-Vietnam agreement - the most comprehensive trade deal the EU has concluded with a developing country - gives Vietnam a longer, 10-year period to eliminate its duties on EU imports.
Nonetheless, many important EU export products, such as pharmaceuticals, chemicals or machinery will already enjoy duty free import conditions as of entry into force.
Agri-food products like beef or olive oil will face no tariffs in three years, while dairy, fruit and vegetables in maximum five years.
Comprehensive provisions on sanitary and phytosanitary cooperation will allow for improving market access for EU firms via more transparent and quick procedures.
The agreement contains specific provisions to address regulatory barriers for EU car exports and grants protection from imitation for 169 traditional European food and drink products (like Roquefort cheese, Porto and Jerez wines, Irish Cream spirit or Prosciutto di Parma ham) recognised as Geographical Indications.
At the same time, the trade agreement expresses a strong commitment of both sides to environment and social rights. It sets high standards of labour, environmental and consumer protection and ensures that there is no 'race to the bottom' to promote trade or attract investment.
Main EU exports to Vietnam are high-tech products, including electrical machinery and equipment, aircrafts, vehicles, and pharmaceutical products. Vietnam's main exports to the EU are electronic products, footwear, textiles and clothing, as well as coffee, rice, seafood, and furniture.
EU-Vietnam trade agreement - background guide