EU and Vietnamese flags

© Fotolia.com/Aleksandar Mijatovic

The European Parliament today approved the EU-Vietnam Free Trade and Investment Agreement.

Federal Minister for Economic Affairs and Energy Peter Altmaier said: "Today's decision by the European Parliament in favour of the EU’s Free Trade and Investment Protection Agreement with Vietnam promotes free trade and sends a strong message against protectionism. Vietnam is a fast-growing market with huge market potential for European products and services. The two agreements secure access for our products to this increasingly important market and also safeguard investments by German companies there. After the conclusion of free trade and investment agreements with Singapore, the two agreements with Vietnam are a further step towards deepening our relations with the countries of South East Asia. The intensification of our trade relations is a win-win for all sides".

The next step is for the Council to approve the Free Trade Agreement, which will enter into force shortly after it has been ratified by Vietnam. With the entry into force of the FTA, 65% of customs duties on EU exports will be eliminated immediately and up to 99% will be abolished at the end of various transition periods (maximum 10 years). The EU will eliminate 71% of its tariffs upon entry into force of the agreement and will abolish 99% of tariffs after seven years. The agreement also confirms the commitments of the contracting parties arising from the multilateral environmental agreements, including the Paris Climate Change Convention. Both parties aim to achieve a high level of protection for environmental and social standards and to continuously improve their laws and practices to this end.

For the EU-Vietnam Investment Protection Agreement to enter into force, it must also be ratified by the EU Member States. The agreement ensures a high level of modern investment protection while preserving the national right to regulate.

Bilateral trade between the EU and Vietnam in 2018 amounted to €49.3 billion, of which €38.2 billion were imports from Vietnam and €11.1 billion exports to Vietnam. Germany is Vietnam's largest trading partner in the EU. Bilateral trade between the two amounted to €13.87 billion in 2018. German exports accounted for €4.11 billion and German imports for €9.76 billion.