HANOI, Vietnam—Vietnam and the European Union signed a free trade agreement on Sunday, June 30, opening opportunities to further boost trade between the euro bloc and one of Southeast Asia’s biggest manufacturing nations.
The agreement, which was signed by European Commissioner for Trade Cecilia Malmstrom and Vietnamese Trade Minister Tran Tuan Anh in Hanoi, Vietnam’s capital, will eliminate almost all tariffs for goods traded between Vietnam and the EU’s 28 member countries.
Once the deal takes effect, the EU will lift 85% of its tariffs on Vietnamese goods, gradually cutting the rest over the following seven years.
Meanwhile, Vietnam will lift 49% of its import duties on EU exports when the agreement is started. The rest will be phased out over 10 years.
Vietnam, with a population of 95 million, is one of the world’s fastest-growing economies, and the agreement is expected to accelerate greater trade volume and create vast opportunities for businesses and consumers on both sides.
Major exports from Vietnam to the EU include phones, footwear, farm products, textiles, and garments. Vietnam imports from EU nations high-tech machinery and equipment, aircraft, vehicles and pharmaceutical products.
Vietnam is the EU’s second-largest trading partner in Southeast Asia, with trade turnover of $56 billion last year, according to the national general statistics office.
The agreement, which had been negotiated since 2012, gives EU companies equal treatment with domestic bidders in competing for public contracts in Vietnam. It also commits Vietnam to standards for sustainable development, including improving its human rights record, protecting labor rights and upholding its pledges to deal with climate change issues under the Paris accord.
Vietnam and the EU also signed an agreement calling for investors to be protected with rules enforced by an investment court system.