The European Commission and Vietnam reached an agreement on trade and investment cooperation through the signing of the Free Trade Agreement and Investment Protection in Hanoi, Vietnam, Sunday (06/30) - Photo: Asia Times.

JAKARTA (TheInsiderStories) – The European Commission and Vietnam reached an agreement on trade and investment cooperation through the signing of the Free Trade Agreement and Investment Protection in Hanoi, Vietnam, Sunday (06/30). In addition, the Commission also reached trade agreements with Mercosur, a South America-block consisting of Argentina, Brazil Paraguay, and Uruguay, on Friday (06/28).

In an agreement with Vietnam, EU Trade Commissioner Cecilia Malmström and Minister of Industry and Trade Tran Tuan Anh said, the free trade agreement was based on a shared commitment from both parties to trade liberalization that is open, fair and rule-based and economic integration.

The agreement also further strengthens the EU’s involvement with the Southeast Asia region, which contributes to strengthening cooperation between ASEAN and the EU, which aims towards closer trade and investment relations between the two regions.

After signature, the agreement will now be presented on the Vietnamese side to the National Assembly for ratification and on the EU side to the European Parliament for its approval, as well as to the national parliaments of each EU Member State in the case of the Investment Protection Agreement.

“We hope for rapid ratification of the agreement by these legislative bodies in the coming months, so that our businesses, workers, farmers, and consumers can get the benefits as soon as possible,” the two leaders said in a joint statement.

Furthermore, the EU will support Vietnam through technical assistance to establish and follow up on implementation plans to facilitate the necessary reforms and adjustments, including in areas such as sanitation and phytosanitary measures and non-tariff barriers.

In addition to economic benefits, the agreement also aims to promote sustainable development in Vietnam and the European Union. In this context, both parties agreed on the importance of ensuring the implementation of obligations under the Trade and Sustainable Development chapter of the trade agreement.

While, in the EU-Mercosur framework, EU President Jean-Claude Juncker said, amidst international trade tensions, the agreement was a strong signal that the EU supports rule-based trade. Through this trade pact, the Mercosur countries have decided to open their markets to the EU.

“I measured my words carefully when I said that this was a historic moment. This is definitely good news for companies, workers and the economy on both sides of the Atlantic, saving more than €4 billion in customs duties per year,” he said in a written statement.

Commissioner Malmström added, this agreement brought Europe and South America closer in the spirit of cooperation and openness. This agreement, she said, provides great opportunities for EU businesses and workers in countries with whom the EU has a strong historical relationship and whose markets are relatively closed up to now.

“Over the past few years, the EU has consolidated its position as a global leader in open and sustainable trade in 15 countries that have been in effect since 2014, especially with Canada and Japan. The agreement adds four more countries to our impressive list of trade allies,” she said.

Meanwhile, Commissioner for Agriculture and Rural Development Phil Hogan said, the agreement was a fair and balanced agreement with opportunities and benefits on both sides, including for European farmers.

“Our typical and high-quality EU agricultural-food products will now get protection in the Mercosur countries they deserve, support our market position and grow our export opportunities,” he said.

This agreement will encourage exports of EU products which have been facing high tariffs and sometimes hamper. That includes cars (35 percent), auto parts (14-18 percent), machinery (14-20 percent), chemicals (up to 18 percent), medicines (up to 14 percent), clothing and footwear (35 percent ) or knitted fabric (26 percent).

While the agri-food sector, the EU will benefit from Mercosur’s high tariff cuts on EU export products: chocolate and sweets (20 percent), wine (27 percent), alcohol (20-35 percent), and soft drinks (20-35 percent).

The agreement will also provide duty-free access with a quota for EU dairy products (currently a 28 percent tariff), especially for cheese.

Furthermore, the two parties committed to effectively implementing the Paris Climate Agreement, which covers issues such as sustainable management and forest conservation, respect for labor rights and promotion of responsible business behavior.

Finally, both parties will now make a legal revision of the text agreed upon to produce the final version of the Association Agreement and all aspects of its trade for later approval.

Written by Staff Editor, Email: theinsiderstories@gmail.com