Overwhelming approval . . .
The European Parliament ratified the EU-Vietnam Free Trade Agreement (EVFTA) and EU-Vietnam Investment Protection Agreement (EVIPA) by a majority vote of 401 to 192 on February 12. The agreements pave the way for increased trade and investment between the two parties. The EVFTA will eliminate 99 per cent of custom duties between the EU and Vietnam. Sixty-five per cent of duties on EU’s exports to Vietnam and 71 per cent of duties on Vietnam’s exports to EU will be eliminated immediately, while the remaining duties will be phased out gradually over a period of 7 to 10 years. The National Assembly of Vietnam is expected to ratify the two agreements in May 2020.
EU ratifies despite human rights concerns . . .
That the EU secured a trade deal with Vietnam despite its concerns over human rights in the country demonstrates that Vietnam is as an increasingly attractive and competitive investment destination in Southeast Asia. According to Vietnam’s Foreign Investment Agency, the EVFTA is expected to increase Vietnam’s GDP by 4.6 per cent and exports to the EU by 43 per cent by 2025. The two agreements will contribute to accelerating Vietnam’s integration into the global economy and possibly serve as a key driver for Vietnam’s institutional reform, improvements to labour law, promotion of sustainable development practices, and enhancement of investment and intellectual property regulation.
ASEAN centrality . . .
The EVFTA is the second trade deal between the EU and a Southeast Asian country, behind the 2019 EU-Singapore free trade agreement. This points to the EU’s drive to speed up its negotiations with the Association of Southeast Asian Nations (ASEAN) for a trade agreement, which began in 2007. The EU’s ongoing efforts has been met with increased competition from Canada and the United Kingdom. Canada has conducted exploratory discussions for a possible Canada-ASEAN FTA since 2017 and the U.K. has increased its engagement in the region by opening a new mission and appointing an ambassador to ASEAN.
READ MORE
- The Diplomat: What does the UK’s new ASEAN mission say about its Southeast Asia engagement post-Brexit?
- Human Rights Watch: EU: press Vietnam on human rights reform
- Vietnam Briefing: Vietnam-EU trade: EVFTA ratified by EU lawmakers
