After nearly three years of intense negotiations, the European Union (EU) and Vietnam agreed to a free trade agreement (FTA) on Tuesday that will remove nearly all tariffs on goods traded between the two countries.
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“We have a deal. This finely balanced agreement will boost trade with one of Asia’s most dynamic economies. It sets a new, better and modern model for Free Trade Agreements between the EU and developing countries, and establishes a good standard for the trade relationship between the EU and South East Asia as a whole,” EU Trade Commissioner Cecilia Malmstrom said.
The new deal reached between the two countries could provide significant opportunities for European and Vietnamese companies while it increases market access for goods and services.
Vietnam, classified as a frontier market, is a growing and fast developing market, with 90 million consumers could also benefit Europe, where 31 million jobs are dependent on exports.
— European Commission (@EU_Commission) August 4, 2015
Trade between EU and Vietnam in 2014 reached €28.3 billion, with €22.1 billion in imports from Vietnam into the EU.
Key imports from Vietnam to the EU include telephones, electronics, footwear, textiles and clothing, coffee, rice, seafood, and furniture.
EU exports to Vietnam are dominated by high tech products, which include machinery and equipment, aircraft, automobiles, and pharmaceuticals.
Vietnam’s exporters’ access to the EU will become much easier with the trade deal, giving an “important boost to the Vietnamese economy,” according to Malmstrom.