Producers and exporters of Vietnamese seafood will be among the chief beneficiaries of a new Free Trade Agreement (FTA) between the Southeast Asian country and the EU that has been agreed in principle after almost three years of negotiations.
Some technical issues and the final legal texts still need to be ironed out by negotiators, but EU Trade Commissioner Cecilia Malmstrom and Vietnamese Minister of Industry and Trade Vu Huy Hoang have agreed the substance of the agreement. Once these details are finalized, the deal will need to be approved by the Council and the Parliament.
The new agreement is the most ambitious and comprehensive FTA that the EU has ever concluded with a developing country. It is Brussels' second FTA in the ASEAN region after Singapore and is a big step toward its ultimate objective of a region-to-region EU-ASEAN FTA.
This agreement will allow EU exporters and investors to access a fast-growing market of 90 million people. Vietnam will also open its doors for most EU food products, both primary and processed, allowing its expanding band of middle-class consumers to buy high-quality EU goods.
Vietnamese exporters, meanwhile, will benefit from the elimination of almost all EU customs duties.
Under the FTA, Vietnam will liberalize tariffs over a 10-year period and the EU will liberalize tariffs over seven years.
The FTA will also contain a legally binding link with the Partnership and Cooperation Agreement (PCA) that governs the overall relationship between the EU and Vietnam. Signed in June 2012, the PCA includes a human rights clause and provisions on cooperation on human rights.
The EU and Vietnam have further agreed on a chapter on trade and sustainable development, with an extensive list of commitments that includes a dedicated article on climate change and commitments to the conservation and sustainable management of biodiversity, forestry and fisheries.
EU exports to Vietnam are led by high-tech products including electrical machinery and equipment, vehicles and pharmaceutical products, while Vietnam's main export items to the EU include electronic products, textiles, coffee, rice and seafood.
In 2014, the EU-Vietnam trade in goods was worth more than EUR 28.3 billion (USD 31 billion), with EUR 22.1 billion (USD 24.2 billion) in imports from Vietnam into the EU and EUR 6.2 billion (USD 6.8 billion) in exports from the EU to Vietnam.
The EU is also one of the largest foreign investors in Vietnam. In 2013, EU investors committed a total USD 656 million (EUR 598.4 million) in Foreign Direct Investment.
Vietnamese seafood exports achieved a total value of USD 7.9 billion (EUR 7.2 billion) last year, an increase of 18.4 percent on 2013. Its No.1 market was the United States, followed closely by the EU, and its main seafood exports in value terms were frozen shrimp, pangasius and tuna.
