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EU lawmakers approve free trade deal with Vietnam
By Thanh Thom
Wednesday,  Feb 12, 2020,20:05 (GMT+7)

EU lawmakers approve free trade deal with Vietnam

By Thanh Thom

The free trade agreement between Vietnam and the European Union is given the go-ahead by 401 votes for, 192 votes against and 40 abstentions, held in Brussels, Belgium on January 12 – PHOTO: INTA

HCMC – A free trade agreement, seen as the most modern, comprehensive and ambitious” ever concluded between Vietnam and the European Union, got the EU Parliament’s backing on Wednesday.

Members of the European Parliament gave their consent to the free trade agreement by 401 votes for, 192 votes against and 40 abstentions at a session in Brussels, Belgium, according to a statement.

The deal will contribute to setting high standards in the region, and could lead to a future region-to-region trade and investment agreement, according to the Parliament, in an accompanying resolution adopted by 416 votes for, 187 against and 44 abstentions.

The pact is “a strong signal in favor of free, fair and reciprocal trade, in times of growing protectionist tendencies and serious challenges to multilateral rules-based trade,” said the Parliament.

Almost all customs duties gone

The trade deal will remove virtually all customs duties between the two sides over the next 10 years, including on Europe’s main export products to Vietnam: machinery, cars and chemicals.

The deal extends to services such as banking, maritime transport and postal, where EU companies will have better access. Companies will also be able to bid on public tenders put out by the Vietnamese government and several cities, including Hanoi.

It also safeguards 169 emblematic European products, such as oils and animal fats; fresh, frozen and processed meats; spirit, wine, beer and hops; as well as confectionery and baked products.

In addition, the agreement is an instrument to protect the environment and sustain social progress in Vietnam, including labor rights. It commits Vietnam to apply the Paris Agreement.

The Southeast Asian nation is committed to ratify two bills as requested by Parliament, one on the abolition of forced labor by 2020, and the other on freedom of association by 2023.

Dispute settlement between companies and state

Separately, the Parliament agreed by 407 votes for, 188 against and 53 abstentions to an investment protection agreement providing an investment court system with independent judges to settle disputes between investors and state. The accompanying resolution passed by 406 votes for, 184 against and 58 abstentions.

“These state-of-the-art agreements just adopted present a unique opportunity to further the EU’s goal to become a geopolitical player that defends multilateral trade, rejects protectionism, and raises labor, environmental and human rights standards worldwide,” said Rapporteur Geert Bourgeois.

He added the deals will boost prosperity, create new and better paid jobs, cut costs for companies big and small, and give them better access to each other’s markets.

Chairman of the Committee on International Trade Bernd Lange said the following after the vote: “History shows that isolation does not change a country. That is why Parliament voted in favor of this trade agreement with Vietnam. With it, we strengthen the role of the EU in Vietnam and the region, ensuring that our voice has more weight than before.

“This is particularly important on issues on which we disagree, such as the role of the free press or political freedom. We also extend the room for maneuver of civil society. Our work from now on is to make sure the agreement is put into practice.” 

Once the council formally concludes the trade agreement and the parties notify each other that their procedures are closed, it can enter into force. For the investment protection agreement to enter into force, EU member states’ parliaments first need to ratify it.

Vietnam is the EU’s second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth 47.6 billion euros a year and 3.6 billion euros when it comes to services. EU exports to the country grow by 5-7% annually, yet the EU’s trade deficit with Vietnam was 27 billion euros in 2018.

The main EU imports from Vietnam include telecommunications equipment, clothing and food products. The EU mainly exports goods such as machinery and transport equipment, chemicals and agricultural products to Vietnam.

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