The committee gave its consent to the free trade agreement by 29 votes, six votes against and five abstentions and recommends that EP Plenary should do the same.
The EU-Vietnam agreement (EVFTA) will remove virtually all tariffs between the two parties in ten years. It will protect emblematic European products and allow Europe to access the Vietnamese public procurement market.
The agreement is also an instrument to protect the environment and further social progress in Vietnam, including in labour rights, the resolution accompanying the consent decision states.
The trade committee’s demands from Vietnam was adopted by 29 votes for, nine against and two abstentions.
Separately, the trade committee also agreed by 26 votes for, seven against and six 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 27 votes for, seven against and five abstentions.
Parliament is set to vote on the trade deal and the investment protection agreement (IPA) at its February session in Strasbourg. Once Council concludes the trade agreement, it can enter into force. For the investment protection agreement to enter into force, the member states first need to ratify it.
In term of removal of customs duties, 65 per cent of EU exports to Vietnam will be immediately duty free, with the rest - including motorcycles, cars, pharmaceuticals, chemicals, wines, chicken and pork - gradually liberalised over ten years.
71 per cent of Vietnamese exports to the EU will be duty free on day one, with the rest catching up in seven years. Duty-free Vietnamese exports of sensitive agricultural products, such as rice, garlic or eggs, will be limited.
Non-tariff barriers will be eliminated in the automotive sector, export and import licensing, and customs procedures. Vietnam accepted the “Made in EU” marking, beyond national markings of origin, for non-agricultural products.
In services, EU companies will have improved access to business, environmental, postal and courier, banking, insurance and maritime transport services in Vietnam. EU firms will be able to bid for contracts with Vietnamese ministries, state-owned enterprises, as well as with Hanoi and Ho Chi Minh City.
Vietnam is the EU's second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth about $53 billion a year and nearly $4 billion when it comes to services. EU exports to the country grow by 5-7 per cent annually, yet the EU’s trade deficit with Vietnam was nearly $30 billion 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.