Brussels (AP) — The European Union and Vietnam clinched on Tuesday an agreement in principle on a new free trade deal that would see the lifting of most tariffs on goods.
The EU’s top trade official, Cecilia Malmstroem, said the pact would “provide significant new opportunities for companies on both sides, by increasing market access for goods and services.”
Vietnam has a growing and dynamic market of some 90 million consumers and officials expect the pact to spur European investment in the South East Asian nation. Goods trade between the two economies totaled more than 28 billion euros ($30.75 billion) last year, and the EU is Vietnam’s second trading partner after China.
The agreement comes after two and a half years of talks. Experts must now iron out remaining technical issues, such as dispute settlement, before the deal can be officially approved by EU member states and the European Parliament. Malmstroem said it could enter force by late 2017 or early 2018.
Under the deal, Vietnam would liberalize trade in financial services, telecommunications, transport, and postal and courier services over 10 years. EU duties would be eliminated over a 7-year period.
EU companies would be allowed to bid for public contracts in Vietnam on infrastructure like roads, ports and with the national rail operator.
The pact would also contain a legally binding link to the EU-Vietnam partnership agreement to ensure that issues of human rights, democracy and rule of law are tied into trade.