1 In 2017, the Court of Justice of the European Union ruled that certain provisions of the EU-Singapore Free Trade Agreement concerning foreign direct investment and investor-state dispute settlement (ISDS) did not fall within the exclusive competence of the Union and needed to be ratified by the national parliaments of the EU Member States. To unblock opposition to the trade deal, the EU and Singapore have therefore agreed to split the deal into two separate agreements. Negotiations between the EU and Vietnam followed the same process. In 2018, the part of the agreement, which includes investments, was divided into a separate investment protection agreement, EUVIPA. The national ratification process of the EU-Singapore IPA is ongoing and is expected to take at least two years. You can find 2 details in Annex 9-B here. 3 Vietnam was appointed on 5 December 2012 observers of the WTO GPA. Like the provisions of the World Trade Organization (WTO), NAFTA is a comprehensive and beneficial agreement for Vietnam and the EU. The agreement will remove “99% of its import duties over 10 years and the EU will do the same over seven years”. Vietnam will remove 49% of its import duties on EU exports and the rest will expire over 10 years. To benefit from preferential duties under the ECA, distributors must comply with the general rules of origin of the agreement or the product-specific rules of origin and complete a government-issued certificate of origin (form EUR.1) or an origin declaration issued by a certified exporter (i.e. self-certificate of origin).
The IASIA allows for bilateral cumulation of origin, as products manufactured by one Party and containing materials of the other Party qualify for preferential treatment. It also allows for limited cumulation of South Korean fabrics used in textile manufacturing and the possibility of cumulating fishing gear from other ASEAN member countries. The agreements must now be ratified by the Vietnamese National Assembly and, in the case of the Investment Protection Agreement, by EU member states. The free trade agreement focuses on duty-free trade. It contains the total elimination of almost all tariffs, with the exception of certain tariff lines subject to duty-free tariff quotas. When importing products originating in the EU into Vietnam, machinery and appliances, medicines, chemicals, textiles and fisheries (salmon, halibut, trout and man) will benefit from the immediate elimination of customs duties. Tariffs on auto parts, motorcycles, frozen pork, food preparations, wines and spirits are reduced over a seven-year period; Tariffs on cars, chicken and beer will be eliminated for more than 10 years. Vietnam will maintain existing World Trade Organization tariff quotas for sugar, salt and refined eggs, but with a reduction in the quota rate to zero over a 10-year rate.
It took more than eight years and a dozen dialogue sessions for the two sides to negotiate the EVFTA. Nicolas Audier, President of EuroCham in Vietnam, welcomed the result of the vote: “The EVFTA is now more important than ever, as trade wars and a global pandemic disrupt the normal functioning of business to an unprecedented extent. Free, fair and rules-based trade is the best roadmap for economic growth, and Vietnam will now have privileged access to an EU consumer market of around 500 million people who will be interested in doing business and investing with a strong, safe and prosperous nation in the heart of Asia. The agreement provides for overall preferential treatment for both goods and services, the recognition and protection of geographical indications for more than 200 products, liberalised public procurement rules and cartel and merger obligations. It also contains provisions on sustainable development, including legally binding rules on climate, labour and human rights. As such, it is the most comprehensive agreement to date between the European Union and an ASEAN Member State. .