EU-Vietnam free trade deal gets green light in trade committee

Phil Hogan

Phil Hogan, European Commissioner for Trade. European Union, 2020 Source: EC – Audiovisual Service

This article is brought to you in association with the European Parliament.


The Committee on International Trade backed the free trade and investment protection agreements between the EU and Vietnam on Tuesday.

The committee gave its consent to the free trade agreement by 29 votes, six votes against and five abstentions and recommends that EP Plenary should do the same. The agreement will remove virtually all tariffs between the two parties in ten years. It will protect emblematic European products, and allow Europe to access the Vietnamese public procurement market.

The agreement is also an instrument to protect the environment and further social progress in Vietnam, including in labour rights, the resolution accompanying the consent decision states. The trade committee’s demands from Vietnam, including on labour and human rights, as well as on the mechanism ensuring the enforceability of the sustainability clauses, was adopted by 29 votes for, nine against and two abstentions.

The main elements of the trade deal are the following:

  • removal of customs duties: 65% of EU exports to Vietnam will be immediately duty free, with the rest – including motorcycles, cars, pharmaceuticals, chemicals, wines, chicken and pork – gradually liberalised over ten years. 71% of Vietnamese exports to the EU will be duty free on day one, with the rest catching up in seven years. Duty-free Vietnamese exports of sensitive agricultural products, such as rice, garlic or eggs, will be limited;
  • non-tariff barriers will be eliminated in the automotive sector, export and import licensing, and customs procedures. Vietnam accepted the “Made in EU” marking, beyond national markings of origin, for non-agricultural products;
  • geographical indications: 169 emblematic EU products such as Parmigiano Reggiano cheese, Champagne, or Rioja wine, will enjoy protection in Vietnam, as will 39 Vietnamese products in the EU;
  • services: EU companies will have improved access to business, environmental, postal and courier, banking, insurance and maritime transport services in Vietnam ;
  • public procurement: EU firms will be able to bid for contracts with Vietnamese ministries, state-owned enterprises, as well as with Hanoi and Ho Chi Minh City;
  • sustainable development: there are legally-binding rules on climate, labour and human rights. The agreement commits Vietnam to apply the Paris Agreement. Vietnam scheduled the ratification of two remaining bills on the abolition of forced labour and on freedom of association by 2020 and 2023, respectively. If there are human rights breaches, the trade deal can be suspended.

Dispute settlement between companies and state

Separately, the trade committee also agreed by 26 votes for, seven against and six abstentions to an investment protection agreement providing an investment court system with independent judges to settle disputes between investors and state. The accompanying resolution passed by 27 votes for, seven against and five abstentions.

Quote

Rapporteur Geert Bourgeois (ECR, BE) said: “With the consent to this trade deal with Vietnam, the trade committee is giving a positive signal to the ASEAN region and the rest of the world at a time when trade tensions are rising. Besides its geopolitical and economic importance, I am convinced that this agreement will accelerate the reform process within Vietnam. The ratification will strengthen further progress on labour and environmental standards and the respect for human rights.”

Next steps

Parliament is set to vote on the trade deal and the investment protection agreement at its February session in Strasbourg. Once Council concludes the trade agreement, it can enter into force. For the investment protection agreement to enter into force, the member states first need to ratify it.

Background

Vietnam is the EU’s second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth €47.6 billion a year and €3.6 billion when it comes to services. EU exports to the country grow by 5-7 percent annually, yet the EU’s trade deficit with Vietnam was €27 billion in 2018.

The main EU imports from Vietnam include telecommunications equipment, clothing and food products. The EU mainly exports goods such as machinery and transport equipment, chemicals and agricultural products to Vietnam.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

European Super League: Why more football is an imperfect solution to sport’s business model problem

‘Starvation’ now a reality for displaced Syrians stranded in camp near Jordanian border

Challenges facing the COVID-19 vaccination campaigns

EU and 15 World Trade Organization members establish contingency appeal arrangement for trade disputes

4 charts that show how technology is enabling the energy transition

It’s time to build a responsible media supply chain

Trump’s trade war splits the EU; Germany upset with Juncker’s “we can be stupid too”

‘No-deal’ Brexit preparedness: European Commission takes stock of preparations and provides practical guidance to ensure coordinated EU approach

Is flexible working here to stay? We asked 6 companies how to make it work

ECB to people: Not responsible if you lose money on Bitcoin, your governments are

Security Union: Commission receives mandate to start negotiating international rules for obtaining electronic evidence

4 key trends on how COVID has impacted women in business

Coronavirus: Commission proposes EU Strategy for the development and availability of therapeutics

UN General Assembly President upholds value of multilateralism in speech closing annual debate

When should you self-isolate, self-quarantine or social-distance?

Industrial policy: recommendations to support Europe’s leadership in six strategic business areas

David Cameron’s formal letter/threat that officially opens pandora’s box for the UK

90% of fish stocks are used up – fisheries subsidies must stop

Trump and Brexit: After the social whys the political whereto

5 technologies that will forever change global trade

Human rights breaches in Hong Kong, Russia and at the US-Mexican border

Password managers aren’t all they’re cracked up to be. Here’s why

FROM THE FIELD: ‘Harvested’ rainwater saves Tanzanian students from stomach ulcers, typhoid

10 surprising things that rely on artificial intelligence

Will the European Court of Justice change data privacy laws to tackle terrorism?

Britain aligns with EU rivaling US on trade and Iran, abandons bilateral ‘Midsummer Night’s Dream’

Tech can reach the world’s unbanked women – but only if they tell us how it should work

COVID-19 has accelerated India’s digital reset

UN condemns deadly attack against G5 Sahel force headquarters in Mali

EU budget 2022: Speeding up Europe’s recovery and progressing towards a green, digital and resilient future

Thursday’s Daily Brief: ambulance attack in Libya, #GlobalGoals defenders, human rights in Cambodia, Swine Fever

Chinese tech investors are turning towards MENA. Here’s why

Me and China

Consultant in Forensic Technology – 1969

South Asia can become an innovation hub. Here’s how

Mergers: Commission announces evaluation results and follow-up measures on jurisdictional and procedural aspects of EU merger control

Promoting ‘a healthy sustainable future’, the UN health agency engages young and young at heart to ‘Walk the Talk’

It’s time to disrupt Human Resources if we want talent fit for the digital age

It’s down to cities to limit global warming to 1.5°C by 2030

Commission welcomes the political agreement on the proposal for a Public Sector Loan Facility of the Just Transition Mechanism

European Commission and four online marketplaces sign a Product Safety Pledge to remove dangerous products

Parliament wants to grant EU consumers a “right to repair”

Thousands returning to Nigeria’s restive Borno state ‘at risk’; UN ‘gravely concerned’

iSting: a reader’s thoughts on the UN Environment Assembly 2017

UN chief lauds Fijians as ‘natural global leaders’ on climate, environment, hails ‘symbiotic relationship’ with land and sea

Easing ‘classroom crisis’ in Côte d’Ivoire, brick by (plastic) brick

Education remains an impossible dream for many refugees and migrants

A Sting Exclusive: EU Commissioner Mimica looks at how the private sector can better deliver for international development

UN chief condemns air strike that hit school bus in northern Yemen, killing scores of children

European Youth Forum welcomes strong stance on human rights in State of the Union

Mexico cannot move forward ‘without addressing the shadows of the past’, says UN rights chief

This is what happened to CO2 emissions in the EU last year

Indexation of family benefits, child tax credit and family tax credits: Commission takes Austria to Court for discrimination

The European Parliament x-rays the troika’s doings

Migration crisis update: What are the chances of a fair deal at this EU Summit?

The staggering loss of the Arctic Ocean’s oldest sea ice shown in time-lapse

Antitrust: Commission fines US chipmaker Qualcomm €242 million for engaging in predatory pricing

Coronavirus: UN health agency moves fast to tackle ‘infodemic’; Guterres warns against stigmatization

What more than 32,000 people think about the future of work

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s