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 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.
- 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.
EU-Vietnam “trade in goods” statistics
EU and Vietnam
FTA negotiations with 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.
After “region-to-region” negotiations on a free trade agreement (FTA) between the EU and ASEAN countries proved difficult, negotiations for an EU-Vietnam FTA were launched in June 2012. The EU considers the FTAs with individual ASEAN countries as stepping stones towards an agreement in the regional framework, which remains the ultimate goal.
Vietnam has experienced a radical economic and social transformation over the past two decades alongside integration into the global economy. As a rapidly developing and fast growing ASEAN economy, Vietnam holds substantial potential for EU businesses.
The Partnership and Cooperation Agreement between the EU and Vietnam – signed in June 2012 – offers a solid foundation to intensify relations between the two parties.
Vietnam enjoys trade preferences with the EU under the Generalised Scheme of Preferences.
Vietnam and ASEAN
ASEAN as a whole represents the EU’s 3d largest trading partner outside Europe (after the US and China). Of the ten ASEAN members, Vietnam is the EU’s fifth most important trading partner. Negotiating better access for EU exporters to the dynamic ASEAN market is a priority for the EU.
The EU-ASEAN Dialogue includes discussions on trade and investment issues at ministerial and senior economic official levels. It plays an important part in the trade co-operation between the EU and ASEAN.
Trading with Vietnam
- Rules and requirements for trading with Vietnam
- The EU is present on the ground in Vietnam
- Trade relations are part of the EU’s overall political and economic relations with Vietnam
- Vietnam is a member of the World Trade Organisation
- Sustainable impact assessment of the EU-ASEAN Countries Free Trade Agreement (FTA)