EU/Vietnam: the free trade agreement is (yet) in the starting blocks!
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Theme: |
International trade |
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Country: |
EU / VIETNAM |
Free trade agreement « new generation »
The EU/Vietnam agreement is ambitious since it covers subjects beyond trade liberalization « Extra-commercial » sensitive:
- protection of protected geographical indications;
- investment promotion;
- actions on sustainable development;
- respect for the principles of the International Labour Organisation and human rights.
On the trade side, the PCA provides for the elimination of almost all customs duties on imports between the customs territories of Vietnam and the European Union (see EU/Vietnam Free Trade Agreement: Implementation in 2018?).
However, four years after the conclusion of the agreement was announced, it has not yet entered into force...
Where does it block?
There are several reasons for the delay in implementing the PCA:
- Translation and legal verification of the text would still not be finalized;
- Vietnam had not ratified until June 2019 3 of the 8 core conventions of the International Labour Organization (ILO) ;
- The Vietnamese government's commitment to environmental protection is considered insufficient.
Relaunching the process
In an attempt to unblock the situation,the Vice-President of the Republic had adopted on 14 June 2019 by the National Assembly, the resolution of accession of Vietnam to the ILO Convention 98 on the Right to Organise and Collective Bargaining.
The Vietnamese government also informed the EU of its intention to sign the other two fundamental conventions before the end of 2023.
Thus, on 30 June in Hanoi, the European Commission and the Government of Vietnam signed the free trade agreement and the investment protection agreement under the EU/Vietnam PCA.
Next steps
EU/Vietnam APC's commercial component is in the last straight line :
- On the Vietnamese side, we only have to get it ratified.by the National Assembly, which should not be too problematic;
- On the EU side, the trade agreement must first be approved by the European Parliament and then formally endorsed by the Council before it enters into force.
Concerning the Investment protection componentIn addition to the previous stages, it will have to be ratified by the national parliaments of the EU Member States.
To go further...
- Contact our experts in global supply chain management to design and manage your import/export and cross-trade scenarios!
- Check out our service offer dedicated to triangular trade operations from, via or to Vietnam.
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