EU, Vietnam to ink free trade pact

The European Union and Vietnam will sign a free trade agreement and an investment protection pact on Sunday in Hanoi, the European Commission announced on Tuesday.

The Council of the European Union, which represents the executive governments of EU member states, approved the agreements on Tuesday, paving the way for the signature and conclusion.

EU claims the agreements will bring unprecedented benefits for both European and Vietnamese companies, and consumers and workers, while promoting respect for labour rights, environment protection and fight against climate change under the Paris Agreement.

"I welcome the decision taken today by EU member states. After Singapore, the agreements with Vietnam are the second to have been concluded between the EU and a Southeast Asian country, and represent stepping stones to a greater engagement between Europe and the region," European Commission President Jean-Claude Juncker said in a statement.

EU Commissioner for Trade Cecilia Malmstrom and Romanian Minister for Business, Trade and Entrepreneurship Stefan-Radu Opera will sign the deal on EU's behalf. Romania holds the presidency of the European Council in the first half of this year.

"Vietnam is a vibrant and promising market of more than 95 million consumers and both sides have much to gain from stronger trade relations," said Malmstrom.

"Beyond the clear economic benefits, this deal also aims to strengthen respect for human rights as well as protecting the environment and workers' rights."

EU says the FTA is the most ambitious pact ever concluded with a developing nation. It provides for almost complete (99 percent) elimination of customs duties between the two blocks. Some 65 percent of duties on EU exports to Vietnam will disappear as soon as the FTA comes into force, while the remainder will be phased out gradually over a period of up to 10 years.

For Vietnamese exports to the EU, 71 percent of duties will disappear once the FTA comes into force. The remainder will be phased out over a period of up to seven 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, while the IPA will strengthen protection of EU investments in the country, the European Commission said.

After the signing, the agreements will be presented to the European Parliament for approval.

Once the European Parliament has given its green light, the FTA can be officially concluded by the Council and enter into force. However, the investment protection agreement will first need to be ratified by member states. This process is expected to take at least two years.

The FTA talks between EU and Vietnam began in 2012 and concluded in 2015. The formal conclusion of the agreement was delayed by a pending opinion of the European Court of Justice. The European Commission decided to propose two separate agreements after a court opinion in May 2017.

Vietnam is EU's second largest trade partner in Southeast Asia after Singapore, with bilateral goods trade at 50 billion euros ($56.5 billion) and services trade at 4 billion euros ($4.52 billion) in 2017, compared with $148 billion between China and Vietnam in 2018.

chenweihua@chinadaily.com.cn

(China Daily Global 06/27/2019 page4)