Starting August 1, 2020, a new trade regime between the European Union and Vietnam has entered into force and as a consequence European exports to Vietnam are now taxed less.
The Free Trade Agreement between the European Union and Vietnam (“Trade Agreement” — full text accessible here) is the most comprehensive trade agreement the European Union has concluded with a developing country and fully takes into account Vietnam’s development needs by giving Vietnam a 10-year period to eliminate its duties on European imports.
Nevertheless, many key European export products, such as pharmaceuticals, chemicals, and machinery, will enjoy duty-free import conditions as of the moment the agreement entered into force. Agri-food products (e.g., beef and olive oil) will face no tariffs in three years, while dairy, fruits, and vegetables will see tariffs eliminated in five years at the most. Comprehensive provisions on sanitary and phytosanitary cooperation will allow European firms improved market access by means of more transparent and quick procedures.
The Trade Agreement also contains specific provisions to address regulatory barriers for European car exports and grants protection from imitation for 169 traditional European food and drink products. The use of geographical indications (GIs), such as Champagne sparkling wine, Bayerisches bier, Parmigiano Reggiano cheese, Tiroler speck ham, Rioja wine, and feta cheese, will be reserved in Vietnam for products imported from their traditional EU regions. This will benefit European farmers and small businesses producing these traditional products and exporting them to Vietnam. On the other hands, Vietnamese GIs will also be recognized and protected in the EU, further promoting imports of quality products such as Mộc Châu tea and Buôn Ma Thuột coffee.
The Trade Agreement also expresses a strong commitment on both sides to environmental and social rights and sets high standards of labor, environmental, and consumer protection and ensures that there will be no “race to the bottom” to promote trade or attract investment.
Finally, the two parties to the Trade Agreement have committed to ratifying and implementing the eight fundamental Conventions of the International Labour Organization (“ILO”) and respecting, promoting, and effectively implementing ILO principles concerning fundamental rights at work; implementing the Paris Agreement, as well as other international environmental agreements, and acting in support of the conservation and sustainable management of wildlife, biodiversity, forestry, and fisheries; and involving independent civil society in monitoring the implementation of these commitments by both sides.