European Union signed a free trade agreement with Vietnam on Sunday, in Hanoi. The EU described it as “the most ambitious free trade deal ever concluded with a developing country”. It was one of its kind deal as it aimed at opening EU market and trading freely in the world where major world economies have been locking horns over protectionism and trade tariffs.
The latest deal is said to vanquish about 99 percent of the tariffs on goods and services between the European and Vietnamese markets. Besides, some tariffs would progressively be reduced over a decade and some agricultural products would be protected by quotas.
The Vietnamese government celebrated the deal as a ‘historic moment’.
Cecilia Malmstrom, the EU’s chief trade negotiator, said in a statement, “This is a strong statement for open, rules-based trade and another important agreement for the E.U. in South East Asia.”
Though the deal was lauded by both EU and Vietnamese officials, but some members of the European Parliament raised concerns over Vietnam’s human rights record. The deal still needs the approval of the European Parliament.
Lora Verheecke, a Brussels-based activist for Friends of the Earth, an umbrella organization of environmentalist and human rights groups around the world, wrote in an opinion piece in the EU Observer last week that the deal with Vietnam would “have dire consequences for human well-being and our ability to prevent climate and ecological breakdown.”
She said that “corporate courts” included in the deal were likely to favor “big business and rich individuals” over the interest of the general public of Vietnam.
Vietnam, which is Asia’s one of the fastest-growing economies, is said to benefit abundantly from the deal. The EU is Vietnam’s second-largest export market after the US, with main exports including garment and footwear products. It is estimated that deal would increase Vietnamese exports to the EU by over 40 percent by 2025. In 2018, Vietnam’s exports to the EU amounted to nearly 50 billion euros.