International Agreements in Progress: EU-Vietnam Free Trade Agreement

13-10-2016

The recently negotiated free trade agreement (FTA) with Vietnam has been described as the most ambitious deal of its type ever concluded between the EU and a developing country. Not only will it eliminate over 99% of customs duties on goods, it will also open up Vietnamese services markets to EU companies and strengthen protection of EU investments in the country. According to European Commission figures, the FTA could boost Vietnam's booming economy by as much as 15% of GDP, with Vietnamese exports to Europe growing by over one third. For the EU, the agreement is an important stepping stone to a wider EU-south-east Asia trade deal. Despite the obvious economic benefits of the FTA for Vietnam, some of its more vulnerable manufacturing sectors may suffer from competition with the EU. NGOs have also criticised the EU for pursuing closer ties with a politically repressive regime known for its human rights abuses, although the deal includes some safeguards against negative outcomes. Although the content of the FTA has been agreed, its precise wording is still being checked. The finalised text is likely to be presented to the European Parliament for consent in 2017. If the FTA is deemed to be a 'mixed agreement', it will have to be ratified not only by the EU but also by the 28 Member States. First edition. The ‘International Agreements in Progress’ briefings are updated at key stages throughout the process, from initial discussions through to ratification.

The recently negotiated free trade agreement (FTA) with Vietnam has been described as the most ambitious deal of its type ever concluded between the EU and a developing country. Not only will it eliminate over 99% of customs duties on goods, it will also open up Vietnamese services markets to EU companies and strengthen protection of EU investments in the country. According to European Commission figures, the FTA could boost Vietnam's booming economy by as much as 15% of GDP, with Vietnamese exports to Europe growing by over one third. For the EU, the agreement is an important stepping stone to a wider EU-south-east Asia trade deal. Despite the obvious economic benefits of the FTA for Vietnam, some of its more vulnerable manufacturing sectors may suffer from competition with the EU. NGOs have also criticised the EU for pursuing closer ties with a politically repressive regime known for its human rights abuses, although the deal includes some safeguards against negative outcomes. Although the content of the FTA has been agreed, its precise wording is still being checked. The finalised text is likely to be presented to the European Parliament for consent in 2017. If the FTA is deemed to be a 'mixed agreement', it will have to be ratified not only by the EU but also by the 28 Member States. First edition. The ‘International Agreements in Progress’ briefings are updated at key stages throughout the process, from initial discussions through to ratification.