On 30th March 2020, the Council adopted a decision on the conclusion of the FTA between the EU and Vietnam using a written procedure. It is predicted that the FTA will come in to force in early summer 2020, once the Vietnamese National Assembly has ratified the process.
In the Council’s press release, Gordan Grlić Radman, Minister for Foreign and European affairs of Croatia stated that:
“This agreement is the second one we are concluding with a Southeast Asia country, after Singapore. It is also the most ambitious free trade agreement ever concluded with a developing country. We are opening up new trading opportunities, but we are also creating new tools to give impetus to the enforcement of basic freedoms and labour rights in Vietnam.”
The EU-Vietnam FTA makes provisions for:
- Custom duties between the two blocks will reduce by 99%
- Duties on EU exports to Vietnam will reduce by 65% immediately. Over the next 10 years, the remaining duties will be phased out.
- Duties on Vietnamese exports to the EU will reduce by 71% immediately. Over the next 7 years, the remaining duties will be phased out.
- The reduction of many of the existing non-tariff barriers which will enable Vietnamese services and public procurement markets to be open to EU companies.
- Intellectual property protection
- Labour rights and sustainable development (this will include committing to implanting International Labour core standards and UN conventions). Progress has already begun on this commitment.
- “Institutional and legal link to the EU-Vietnam Partnership and Cooperation Agreement” thus allowing action to be taken if there are serious breaches of human rights.
On 30th June 2019, an Investment Protection Agreement (IPA) was signed in conjunction with the FTA. Ratification by the member states needs to take place prior to the agreement being entered into. The IPA will replace the bilateral investment agreements that 21 EU Member States currently have in place with Vietnam.