Vietnam and the EU signed off on a new Free Trade Agreement (FTA) and an Investment Protection Agreement in Hanoi on 30 June.
The FTA is set to result in the eventual elimination of 99 per cent of customs duties between the two trading partners.
More than half (65 per cent) of duties on EU exports to Vietnam will be removed as soon as the FTA enters into force, while the remainder will be removed progressively over the course of the next ten years.
As for Vietnamese exports to the EU, 71 per cent of duties will disappear when the FTA is ratified, and the remainder will be phased out over a period of up to seven years, although some agricultural products will be limited by quotas.
A joint statement from Cecilia Malmström, EU Trade Commissioner, and Tran Tuan Anh, minister of industry and trade for Vietnam, said the agreements “mark a milestone in our strong partnership”.
“They will promote further economic development and reinforce trade and investment ties between Vietnam and the European Union, thereby deepening our cooperation and strengthening our long-lasting relations,” the statement read.
“As the most ambitious free trade deal between the EU and an emerging economy to date, the agreements are based on the joint commitment of the two sides to open, fair, and rules-based trade liberalisation and economic integration.”
The agreements will now be presented to the Vietnamese National assembly and the European parliament for ratification.
“We hope for a swift ratification of the agreements by these legislative bodies in the coming months, in order to allow our businesses, workers, farmers and consumers to reap their benefits as soon as possible,” the statement said.