Vietnam’s National Assembly Approves New Trade Deal With Europe

Vietnam’s parliament unanimously approved a free-trade agreement with the European Union that will scrap almost all tariffs on goods traded between the bloc and the Southeast Asian country.

The National Assembly’s vote followed approval by the European Parliament in February. The agreement is expected to go into effect as early as July after all governments approve it, according to the website of the Vietnam Chamber of Commerce and Industry.

Vietnam will slash 99% of its import duties over 10 years and the EU will do the same over seven years under the pact. The agreement curbs non-tariff barriers and opens up public procurement.

Trade between the EU and Vietnam reached $56.45 billion last year, according to the General Department of Vietnam Customs. Vietnam’s 2019 exports to Europe were $41.5 billion, accounting for 16% of the nation’s shipments that year.

Vietnam, whose economy depends on exports, has inked more than a dozen free-trade agreements in roughly the past two decades.

The trade agreement could increase Vietnam’s gross domestic product by 2.4% and give exports a 12% boost by 2030, according to a World Bank report released in May. The deal will prompt more foreign companies to shift operations to Vietnam, according to a post on the chamber’s website, which cited Minister of Industry and Trade Tran Tuan Anh.

Vietnam’s legislature also passed an investment protection pact with the European Union.