Vietnam, EU sign free trade, investment protection agreements

The EU – Vietnam FreeTrade Agreement (EVFTA) and the EU – Vietnam Investment Protection Agreement(EVIPA) were officially signed in Hanoi on June 30 afternoon, in the witness ofPrime Minister Nguyen Xuan Phuc, Vietnamese National Assembly and Government leaders,and leaders of the European Union (EU).

At the signing ceremony for EVFTA – Photo: VNA

The EVFTA was inked by Minister of Industry and Trade TranTuan Anh and European Commissioner for Trade Cecilia Malmstrom, and the EVIPA,between Minister of Planning and Investment Nguyen Chi Dung and an EU leadingofficial.

Speaking at the signing ceremony, PM Phuc said that at theG20 summit in Japan on June 29, he had an important meeting with President ofthe European Commission Jean-Claude Juncker who stressed that June 30, 2019, isa special day of historical significance in the Vietnam – EU relations.

The signing of the two important agreements has opened up anew horizon for a larger and more comprehensive cooperation and strongerdevelopment of Vietnam and the EU, the Government leader said, thanking EUleading officials for their support.

The EU, with its Look East vision, has taken Vietnam as apartner, PM Phuc stressed, adding that as a country with rich potential fordynamic development of the top level in Southeast Asia which is implementing itsforeign policy of multilateralisation and diversification of relations andhaving a strong vision for intensive and extensive international integration,Vietnam is very happy to cooperate with the EU.

The PM said the EVFTA and the EVIPA will lift bilateral tiesto a greater strategic height, especially amid rising protectionism andnon-traditional security challenges. 

He thanked the EU member states for supporting Vietnam’s runfor a non-permanent seat in the United Nations Security Council for the 2020 –2021 tenure, adding that Vietnam commits to working closely with the EU onglobal issues and at the UN. 

The leader expressed his belief that the European Parliament,parliaments of EU member nations, and the Vietnamese National Assembly willsoon ratify the EVFTA and EVIPA. 

Vietnam will soon issue a national action programme torealise the deals with special measures, he said. 

According to him, with the new pacts, EU enterprises will beable to access not only the 100-million Vietnamese market, but also markets inthe ASEAN, the Comprehensive and Progressive Agreement for Trans-PacificPartnership (CPTPP) and East Asia, thus creating a driving force for East –West cooperation. 

At the signing ceremony, Minister of Industry and Trade TranTuan Anh said the signing of the two agreements will further enhance bilateralties and bring benefits to both sides, marking a new beginning for a newjourney ahead. 

He added that more needs to be done to effectively realisethe deals and benefit business communities and peoples. 

The EVFTA is considered a comprehensive, high-qualityagreement that ensures balanced benefits for both Vietnam and the EU. At thesame time, the agreement complies with the provisions of the World TradeOrganisation (WTO).

The pact has 17 chapters, two protocols and several Memorandaof Understanding, covering trade in goods, principles on goods’ origin,facilitation of trade and customs procedures, sanitary and phytosanitary (SPS)measures, technical barriers to trade (TBT), trade in services, investment,trade defence, competitiveness, state-owned enterprises, Government purchase,intellectual property, trade and sustainable development, and legal andinstitutional issues.

Right after the deal takes effect, more than 85.6 percent oftariff lines imposed on Vietnamese products, equivalent to 70.3 percent ofVietnam’s export turnover to the EU, will be removed. After seven years fromthe entry into force of the agreement, the EU will abolish 99.2 percent oftariff lines, or 99.7 percent of Vietnam’s export turnover. For the remaining0.3 percent of shipments, the EU pledged to provide Vietnam with tariff quotaof 0 percent.

The level of commitment in the EVFTA is the highest that apartner has made under any FTA Vietnam has signed. It has significant meaningespecially as the EU has been one of the two largest export markets of Vietnamfor many years.

Regarding the EU’s exports, Vietnam commits to remove 48.5percent of import tariff on goods from the EU, or 64.5 percent of the bloc’sexport turnover, immediately after the deal takes effect. The figure will beincreased to 91.8 percent seven years later. For the remaining EU exports,Vietnam will apply a tariff elimination roadmap for longer than 10 years orapply the WTO’s duty quota.

Under the EVIPA, both sides pledged national treatment andmost favoured nation treatment to investors of the other side, as well as fairand satisfactory treatment, safe and full protection. Both sides will allow thefree movement of capital and profit abroad, pledging not to expropriate ornationalise investors’ assets without appropriate compensation. Furthermore,they pledge to compensate the losses of the other side’s investors in the sameway as domestic investors or the third-party investors as a result of war andriots.

On the occasion of the signing of the two importantagreements, the Vietnam News Agencyorganised a photo exhibition on the negotiation process of the two pacts.

Source: VNA

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