Vietnam, EU clinch landmark free trade deal

Vietnam Minister of Industry and Trade Vu Huy Hoang and European Commissioner for Trade Cecilia Malmstrom signed the announcement in Brussels— officially concluding negotiations on the free trade accord.

Following the signing ceremony for the deal, Trade Commissioner Cecilia Malmstrom welcomed the news, saying the deal is good news for both sides.

Until the last minute there were a number of pending issues that put the accord’s final passage at risk but Malmstrom said Vietnam has agreed to the EU's new approach to investment protection with a permanent tribunal rather than ad-hoc arbitration panel.

Following massive opposition to the original terms reached in August, the EU Commission came in September with a new way of resolving disputes between investors and states that met with all parties’ satisfaction.

Malmstrom said EU exports to Vietnam are dominated by high-tech products including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products.

Meanwhile, Vietnam's key export items to the EU include telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture.

“Vietnam has a vibrant economy of more than 90 million consumers, with a growing middle class and a young and dynamic workforce. Its market has great potential and offers numerous opportunities for EU agricultural, industrial and service exports.”

Malmstrom rejected out of hand claims that the deal with Vietnam would put some agricultural markets in the EU at risk.

Following the signing ceremony, Ambassador and Head of the EU Delegation to Vietnam Bruno Angelet said the EU member countries now have two years to ratify the agreement during which Vietnam will start taking the transitory steps to prepare for its launch.

Vietnam Minister of Industry and Trade Vu Huy Hoang in turn expressed high expectations for future benefits under the pact.

“In the past fifteen year Vietnam’s combined imports and exports with EU member countries has increased eightfold, having gone from US$4.5 billion in 2001 to more than US$30.8 billion in 2014,” Minister Hoang said.

He underscored the point that in 2014, the combined exports by businesses operating in Vietnam to the EU was US$22.6 billion while imports registered US$8.2 billion resulting in a surplus of US$14.4 billion.

“We’re hopeful that with the elimination of tariffs on the majority of export line items combined with the removal of import quotas, Vietnamese domestic companies can become yet more competitive in the EU,” said Minister Hoang.

EU member states represent one of the largest foreign investors in Vietnam, said Hoang, noting they collectively have invested US$36 billion in some 2,030 business ventures throughout the Southeast Asian nation.

“Free trade is indispensable to growth,” said Associate Professor and Dr Tran Dinh Thien in reference to the signing and I am convinced the FTA will provide new market access opportunities for businesses on both sides.

The way ahead is now clear to begin the legal review and translation of the agreement into the EU's official languages and Vietnamese followed by the submission of a proposal to the Council of Ministers for approval and ratification by the European Parliament.