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Vietnam’s Minister of Industry and Trade Vu Huy Hoang and EU Trade Commissioner Cecilia Malmström inked the statement in Brussels with Prime Minister Dung and EC President Jean-Claude Juncker witnessing, according to a statement issued by the ministry.
The EU-Vietnam FTA is regarded as a milestone in promoting the two sides’ economic, trade and investment cooperation as well as bringing their all-round partnership to a higher plane. It would take the EU nations around two years to ratify the trade pact.
The two sides expect the FTA to take effect in 2018.
Under the agreement, Vietnam and the EU will remove up to 99% of tariffs, except for a small number of tariff lines for which the two sides agreed on partial liberalization through zero-duty Tariff Rate Quotas.
According to the ministry, the FTA talks were concluded at a time when ties between Vietnam and the EU are growing strongly, especially in economic and trade fields. The pact will give a strong boost to trade, investment and economic cooperation and help create more jobs in Vietnam and the EU.
In August, Vietnam and the EU agreed in principle on the FTA after two and a half years of intense negotiations.
Earlier, some Vietnamese firms said they were not concerned about competition with EU goods because EU nations produce quality and expensive goods targeting high-income earners. Meanwhile, Vietnamese exporters usually confront quality and hygiene problems when shipping goods to EU countries.
The EU is Vietnam’s second largest trade partner after China. Two-way trade increased eightfold from US$4.5 billion in 2001 to US$36.8 billion last year.
Bilateral trade between Vietnam and the EU hit US$30.8 billion in January-September, a year-on-year rise of 15.5%. Vietnam’s exports accounted for US$22.6 billion of the total, according to the Vietnam News Agency.
By June 2015, companies from 23 of 28 EU member states had got involved in more than 2,100 projects worth over US$38.4 billion. A majority of this investment sum goes to manufacturing, construction and service sectors.
The EU is also one of the major official development assistance (ODA) donors of Vietnam. Between 1993 and 2013, the EC and EU members pledged to provide nearly US$14 billion in ODA for Vietnam, making up 20% of the total committed by the international donor community.
In the 2014-2020 period, the EC has pledged 400 million euros (US$423.5 million) in aid for the Southeast Asian country.
Vietnam and the EU established diplomatic ties in November 1990. A series of activities have been held throughout this year to celebrate the 25th anniversary of the establishment of diplomatic relations.
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