On 4 August 2015, the EU and Vietnam reached an agreement in principle for a free trade deal. Negotiations for an ambitious and comprehensive FTA [Free Trade Agreement] were launched in June 2012 with a view to ensuring an effective environment for trade and investment relations. The EU and Vietnam still need to settle remaining technical issues and finalise the legal text. Once finalised, the agreement will need to be approved by the Council and the Parliament. The agreement will contain a legally binding link to the Partnership and Cooperation Agreement (PCA) that governs the overall relationship between the EU and Vietnam.
The agreement in principle reached on 4 August 2015 for a free trade deal includes the elimination of nearly all tariffs (over 99%). Vietnam will liberalise tariffs over a 10-year period and the EU will liberalise tariffs over a 7 year period. The agreement also covers non-tariff barriers to trade and other trade related aspects such as public procurement, regulatory issues, competition, services, investment, intellectual property rights, and sustainable development.
- EU exports to Vietnam are dominated by high tech products including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products. Vietnam’s key export items to the EU include telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture.
- The EU has a negative balance of trade in goods with Vietnam. In 2014, EU-Vietnam trade in goods was worth over €28.3 billion, with €22.1 billion in imports from Vietnam into the EU, €6.2 billion in exports from the EU to Vietnam.
- The EU is one of the largest foreign investors in Vietnam. In 2013, EU investors committed a total US$ 656 million in Foreign Direct Investment and thus remain Vietnam’s sixth largest foreign investor’s partner.
Update from the EU Commission