Vietnam's Prime Minister Nguyen Tan Dung (L) meets with European Commission President Jean-Claude Juncker at the European Commission in Brussels on Dec 2, 2015. (Photo: AFP)
The free trade agreement (FTA
) was inked by EU
Trade Commissioner Cecilia Malmstroem and Vietnamese Trade Minister Vu Huy Hoang
during Prime Minister’s tour to the EU.
The agreement will liberalize 99% of tariffs on goods traded between the 28-nation bloc and the communist country over a period of up to seven years, except for a small number of tariff lines for which the EU and Vietnam agreed on partial removal through zero-duty Tariff Rate Quotas.
The agreement is the first that the EU has concluded with a developing country and Vietnam is the second country after Singapore out of the 10-member ASEAN to have signed an FTA with the EU.
Vietnam’s exports to the EU are expected to increase an additional 4%-6% annually in comparison with no EU-Vietnam FTA, said Minister Hoang.
Bilateral trade rose to $36.8 billion in 2014 from $17.75 billion in 2010. The value grew 11% year-on-year to $19.4 billion in the first half of this year, of which Vietnam shipped $14.9 billion worth of goods to the European market.
EU countries have invested $38.4 billion in 2,100 projects in Vietnam, marking their presence in almost key sectors such as manufacturing, construction and services in the latter.