After two and a half years of negotiations, the EU and Vietnam agreed last week in principle on a free trade agreement. The deal will eliminate almost all tariffs and dramatically reduce other non-tariff barriers in Vietnam for EU products. Investment and government procurement for EU companies will also be made easier in the South Eastern nation. The deal will provide EU companies with a market of 90 million in Vietnam, as well as provide Vietnam – a developing country, with significant incentives for growth, the two parties hope. A legally binding link with the EU-Vietnam general partnership treaty was also negotiated, meaning that human rights and other non-trade related issues are also part of the equation – if Vietnam violates human rights, the FTAs advantages can be suspended. The EU-Vietnam treaty, when put to practice, will be the second between the EU and an ASEAN country (following the EU-Singapore deal). The EU chose a country-by-country approach to trade negotiations following the assessment, that an inter-regional EU-ASEAN deal would be overly complicated. The agreement in principle reached last year will now need to be translated into the exact wording of the deal, meaning that some technical hurdles still need to be resolved on the technical level. The Commission expects the deal finished and ready for ratification by the Council and by the European Parliament in a few months´ time, certainly before the end of this year.
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On the subject of EU-Asian FTAs, Italian PM Matteo Renzi and Japanese PM Shinzo Abe issued a statement following their meeting last week, urging to speed up the negotiations of an EU-Japan strategic partnership and free trade deal. The two partners promised to work towards a successful conclusion of the treaty by the end of 2015. Meanwhile, India suspended its un-freezing of free trade talks with the EU following a refusal of EU regulators to lift the ban on Indian generic pharmaceutics on the EU market.
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6th January 2023