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.

For more info visit: https://www.europarl.europa.eu/news/en/press-room/20200121IPR70703/eu-vietnam-free-trade-deal-gets-green-light-in-trade-committee

(Source: EU Parliament)

Products’ safety self declaration in Vietnam?

Decree No 15, effective since 2 February, 2018, will permit organisations and individuals producing and selling food to self-declare food-product origins and quality, replacing the long-standing method of keeping records at public management agencies and ask for authorizations.

According to local businesses, in the past, to apply for the certificate, an enterprise must prepare two sets of documents and each set had 11 different kinds of papers.

According to a survey of the Central Institute for Economic Management announced recently said that to apply for a food safety hygiene certificate, each enterprise must pay about VN$10 million (US$440), and VN$30 million (US$1,300) in some cases.

(Source: Vietnam Net, Vietnam Plus)

I am totally against the meaningless bureaucracy and very well aware of the global trend of shifting responsibilities to the food business operators and enhancing private-public cooperation control models: this is the future, since the competent authorities won’t have the means and the budgets to check everything. The number of checks to perform is too high and the type of controls too wide.

But, in a country where the food safety average level is still one of the worst worldwide (see one of the thousands of articles regarding the topic: link) maybe this is a too bald move: Vietnam, according to the above mentioned trend, is also strengthening the criminal and administrative sanctions for food safety violations and reviewing the existing food legislation, to protect domestic consumers and meet the strictest requirements of some importing countries (like the EU block itself).

My doubt is that in an environment still not characterized by a solid business culture, this decision would be a step back on this road.