The European Union has approved a trade agreement with Vietnam, disproving skeptics who thought the EU's divorce with Britain and Vietnam human rights concerns would delay the vote.
Members of the EU Parliament last week voted 401 to 192 in favor of ratifying the agreement, which would roll back almost all import tariffs between the bloc and Vietnam. The EU is looking for new economic tailwinds amid concerns with other partners: the British exit from the union threatens commerce, while U.S. President Donald Trump has turned his attention from the China trade war to issue more tariffs against the European Union this month. The vote was also welcomed as good news by Vietnam, which worries its economy will be hurt by the U.S.-China trade war and the spread of the new coronavirus.
“History shows that isolation does not change a country,” said Bernd Lange, chair of the EU Parliament trade committee and vice chair of the Progressive Alliance of Socialists and Democrats. “That is why Parliament voted in favor of this trade agreement with Vietnam. With it, we strengthen the role of the EU in Vietnam and the region, ensuring that our voice has more weight than before.”
The EU-Vietnam Free Trade Agreement would be Europe’s second in Southeast Asia, after one with Singapore. Its decreased tariffs are expected to increase Vietnamese exports of seafood, textiles, and wood products to the EU, and EU exports of beverages, machinery, and drugs to Vietnam.
This is Europe’s “most ambitious trade agreement with a developing country,” said the German Business Association of Vietnam in an email.
The agreement is considered ambitious because it is meant to hold parties to a higher environmental and social standard than merely decreasing tariffs for companies. Vietnam’s one-party state promised to certify that timber isn’t illegally logged before it’s exported, for instance. It also promised to allow labor unions independent of the government.
However Emmanuel Maurel, a member of the European Parliament from France, doesn’t believe Vietnam will keep its promise. He also criticized the trade agreement as benefiting not the average citizen but a small fraction of companies that will find it easier to offshore jobs.
“There are losers on the Vietnamese side and there are losers on the European side,” he said.
Vietnam has not ratified the agreement. Its parliament meets two times a year, so its next chance to vote on the agreement will be in May.
Negotiations dragged on for the agreement, which many had expected would have been finalized years ago. Delays included the 2017 inauguration of Trump, who withdrew from the Trans-Pacific Partnership, another trade agreement that included Vietnam. Because Vietnam wanted to implement the TPP and the EU agreement at the same time, it postponed the latter deal until more recently.
However now Vietnam has welcomed the European Union’s favorable vote this month and looks set to emulate it.
“This is a meaningful result for Vietnam and the EU, two comprehensive strategic partners,” Minister of Industry and Trade Tran Tuan Anh, said.