Brussels, 31 Jul (efe-epa).- A free trade agreement approved between the European Union and Vietnam will come into force from Saturday, the European Commission said in a statement Friday.
The deal will have an immediate effect with lower tariffs on European exports to the Asian country, according to the EC, which added that ultimately the treaty will eliminate fees on 99 percent of goods traded by both parties.
European companies will also find it easier to do business in Vietnam, as the agreement will allow them to invest and participate in public tenders on an equal footing with their local competitors, it added.
EC President Ursula von der Leyen said in a statement the pact will give European companies the opportunity to “access new emerging markets and create jobs”.
“I strongly believe this agreement will also become an opportunity for people of Vietnam to enjoy a more prosperous economy and witness a positive change and stronger rights as workers and citizens in their home country,” she added.
The treaty also includes guarantees of respect for labour rights, environment protection and the Paris Agreement on climate, through strong, legally binding and enforceable provisions on sustainable development, the EC said.
It is the most comprehensive trade agreement the EU has finalized with a developing country and it has taken into account Vietnam’s development needs by giving it a 10-year period to eliminate tariffs on European imports, it continued.
EC commissioner for trade Phil Hogan said: “Vietnam is now part of a club of 77 countries doing trade with the EU under bilaterally agreed preferential conditions.
“The agreement strengthens EU economic links with the dynamic region of South-East Asia and has an important economic potential that will contribute to the recovery after the coronavirus crisis.”
Many important products for the EU, such as pharmaceuticals, chemicals and machinery, will have tariff-free conditions to enter Vietnam from Saturday.
Agri-food products such as beef and olive oil will have no tariffs in three years, while dairy products, fruit and vegetables will be the same in a maximum of five years, according to the EC.
Sanitary and phytosanitary procedures will also be more transparent and quicker and there will be specific provisions to deal with regulatory barriers to European vehicle exports, as well as protection against imitations of 169 European food and drink products which are recognised by their geographical indications.
Vietnam is the EU’s second-largest trading partner after Singapore in the Association of Southeast Asian Nations (ASEAN), which also includes Myanmar, Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines and Thailand.
Its trade in goods last year totalled 45.5 billion euro and trade in services was four billion, according to EC figures.
The EU’s main exports to Vietnam are high-tech products including electrical machinery, aircraft, vehicles and pharmaceuticals.
Vietnam mainly exports electronics, footwear, textiles and clothing to Europe, as well as coffee, rice, seafood and furniture.
With 7.4 billion euro of foreign direct investment stock in 2018, the EU is one of the largest foreign investors in Vietnam, mainly in the industrial processing and manufacturing sectors.
Vietnam has become the second ASEAN country to have a free trade agreement with the EU, which also has deals with Japan and South Korea. EFE-EPA