Europe notches new trade win as Vietnam pact clears final hurdle
13 février 2020
The European Parliament approved a free-trade agreement with Vietnam after winning concessions from Hanoi that may show the way for ratification of a bigger commercial deal between Europe and South America.
The European Union
assembly on Wednesday in Strasbourg, France, endorsed an accord that
will scrap almost all tariffs on goods traded with Vietnam. The two-way
commerce, ranging from cars and pharmaceuticals to footwear and rice,
was worth almost 50 billion euros ($55 billion) in 2018.
To ensure majority support for the pact in the 705-seat EU
Parliament, leading members secured concrete commitments from the
Vietnamese government to bolster labor rights in the country. That
campaign helped to win over assembly members concerned about respect for
fundamental freedoms in Vietnam, a one-party, communist state.
will eliminate 99% of its import duties over 10 years and the EU will
do the same over seven years under the deal, which is due to take effect
around July once EU governments and Hanoi go through the formality of
giving the final green light. The accord also curbs non-tariff barriers
and opens up public procurement.
by negotiators in 2015, the agreement has been delayed in part by a
European court case over the role of national parliaments in the EU in
approving bloc-wide pacts covering trade and investment.
The EU is reacting to a stalled 2007 trade initiative
involving the 10-member Association of Southeast Asian Nations by
seeking commercial deals with individual ASEAN countries. The bloc,
which already secured an agreement with Singapore, says bilateral
accords can serve as building blocks to an EU-ASEAN pact.
More generally, the EU is sidestepping stalled World Trade Organization
efforts to open markets and countering U.S. protectionism under
President Donald Trump through deals with nations around the globe. The
bloc last year reached a major agreement
with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay
following groundbreaking free-trade pacts with Canada and Japan.
EU-Mercosur accord, whose approval process in Europe won’t start for
about another year, faces a rough ride as a result of a political anger
in the bloc over Brazilian President Jair Bolsonaro’s alleged
backsliding on environmental protection including in the Amazon region.
that context, the labor-rights pledges made by the Vietnamese
government may serve as a model for the way the bloc addresses
opposition in Europe to the Mercosur pact.
Lange, chairman of the EU Parliament’s trade committee, said it used
leverage offered by the draft market-opening pact to gain Vietnamese
commitments to respect three core International Labour Organization
conventions and to upgrade the country’s labor code. Lange also cited
the creation of a group to monitor enactment of the agreement.
“It’s a democratic success story,” Lange, a German Socialist, told reporters.