The Free Trade Agreement (“FTA”) between the EU and Vietnam will be signed on 30 June 2019.
At a time when the UK are attempting to establish their own post-Brexit trade deals, the EU has secured an agreement with Vietnam that is said to be the most ambitious free trade deal ever concluded with a developing country. After Singapore, Vietnam is the EU’s second largest trading partner in the Association of Southeast Asian Nations (ASEAN), with trade of goods worth EUR 8.3 billion a year and EUR 4 billion in services.
The FTA will result in the following:
• 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.
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.
Negotiations over a FTA between the EU and Vietnam began in June 2012 and were concluded on 2 December 2015. However, there was a significant delay over the formal conclusion of the agreement, due to a pending opinion of the European Court of Justice in relation to the EU-Singapore FTA.
As a European Union member, the UK are automatically part of about 40 trade agreements, which the EU has with more than 70 countries. However, if the UK leaves the EU without a deal, then it would lose these trade deals immediately. The trade deals would be worth about 11% of total UK trade. Currently the UK has managed to only secure 11 “continuity” deals with certain countries and regions.
