EU-Vietnam free trade deal gets green light in trade committee

On 21st January 2020, the committee gave its consent to the free trade agreement by 29 votes, six votes against and five abstentions and recommends that EP Plenary should do the same. The agreement will remove virtually all tariffs between the two parties in ten years. It will protect emblematic European products, and allow Europe to access the Vietnamese public procurement market.

The agreement is also an instrument to protect the environment and further social progress in Vietnam, including in labour rights, the resolution accompanying the consent decision states. The trade committee’s demands from Vietnam, including on labour and human rights, as well as on the mechanism ensuring the enforceability of the sustainability clauses, was adopted by 29 votes for, nine against and two abstentions.

The main elements of the trade deal are the following:

  • removal of customs duties: 65% of EU exports to Vietnam will be immediately duty free, with the rest – including motorcycles, cars, pharmaceuticals, chemicals, wines, chicken and pork – gradually liberalised over ten years. 71% of Vietnamese exports to the EU will be duty free on day one, with the rest catching up in seven years. Duty-free Vietnamese exports of sensitive agricultural products, such as rice, garlic or eggs, will be limited;
  • non-tariff barriers will be eliminated in the automotive sector, export and import licensing, and customs procedures. Vietnam accepted the “Made in EU” marking, beyond national markings of origin, for non-agricultural products;
  • geographical indications: 169 emblematic EU products such as Parmigiano Reggiano cheese, Champagne, or Rioja wine, will enjoy protection in Vietnam, as will 39 Vietnamese products in the EU;
  • services: EU companies will have improved access to business, environmental, postal and courier, banking, insurance and maritime transport services in Vietnam;
  • public procurement: EU firms will be able to bid for contracts with Vietnamese ministries, state-owned enterprises, as well as with Hanoi and Ho Chi Minh City;
  • sustainable development: there are legally-binding rules on climate, labour and human rights. The agreement commits Vietnam to apply the Paris Agreement. Vietnam scheduled the ratification of two remaining bills on the abolition of forced labour and on freedom of association by 2020 and 2023, respectively. If there are human rights breaches, the trade deal can be suspended.

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(Source: EU Parliament)

EU-USA trade agreements negotiations

José Manuel Durão Barroso
José Manuel Durão Barroso (Photo credit: Wikipedia)

USA is the first export destination for EU’s food and drink products: the value of these trades in 2012 amounted to € 13.6 bn.

So it is understandable the interest to an agreement on both sides of the ocean, and the enthusiasm for the formal launch of negotiations announced at the G8 summit in Northern Ireland. The Transatlantic Trade and Investment Partnership (TTIP) could bring great benefits, both in terms of economic growth, and employment.
The President of the European Commission, José Manuel Barroso, said:

“We intend to move forward fast. We can say that neither of us will give up content for the sake of speed, but we intend to make rapid progress. I’d rather see the core challenge, moving our regulatory regime closer, and addressing the harmful effect of behind-the-border trade barriers. Huge economics benefits are expected from reducing red tape, avoiding divergent regulations for the future. The potential economic gains for the EU are estimated at around € 120 billion a year. And the real beauty of this deal is that it will offer real returns of around € 545 per average household in Europe almost for free. This makes it the cheapest stimulus package one can imagine”.

These are the reactions of FoodDrinkEurope President, Jesús Serafín Pérez:

“Europe’s food and drink industry welcomes the formal launch of trade negotiations between the European Union and the United States. We particularly welcome President Barroso’s announcement that the parties will look at ways to ‘reduce red tape and avoid divergent regulations for the future’. As Europe’s largest manufacturing industry, and the world’s largest exporter and importer of food and drink products, we look forward to playing an active role and providing input to the negotiations on this Agreement, which has the potential to drive growth and facilitate access to a major export market, thereby generating new opportunities for Europe’s food and drink manufacturers”.

David Cameron said the deal would be the biggest in history and was a “once in a generation prize” he was determined to seize.

“There is no more powerful way to achieve that than by boosting trade and there’s no better way than by launching these negotiations on a landmark deal between the European Union and the United States of America, a deal that could add as much as £100 billion to the EU economy, £80 billion to the US economy and as much as £85 billion to the rest of the world”.

He added: “We are talking about what could be the biggest bilateral trade deal in history. A deal that will have a greater impact than all the other trade deals on the table put together.”

However several regulatory barriers remain: just think about the different positions about the hormone treated beef meat.

An example of the cooperation between EU and US could be the recent bilateral cooperation arrangement on organic equivalence. The EU and U.S. have recognised each other’s organic production rules and control systems as equivalent under their respective rules. This type of recognition, also referred to as an “equivalence arrangement”, means that organic products certified to the USDA organic or European Union (EU) organic standards may be sold and labelled as organic in both the U.S. and the EU. As long as the operation is certified by a USDA-accredited certifying agent or an EU Member State recognised control body or control authority, this recognition eliminates the need for EU organic operators to have a separate certification to the U.S. standards (NOP) and vice versa.

The first round of negotiations it will be in Washington on July 8th and the process is expected to take up to two years.