The free trade agreement focuses on duty-free trade. It provides for the total abolition of almost all tariffs, with the exception of certain tariff quotas subject to duty-free tariff quotas. When products originating in the EU are imported into Vietnam, machinery, pharmaceuticals, chemicals, textiles and fisheries (salmon, halibut, trout and homer) benefit from the immediate abolition of tariffs. Tariffs on auto parts, motorcycles, frozen pork, food preparations, wines and spirits are abolished over a 7-year period; Tariffs on cars, chickens and beer are abolished over a 10-year period. Vietnam will maintain the Existing World Trade Organization tariff quotas for refined sugar, salt and eggs, albeit with a reduction of the quota to zero on a 10-year value. In February 2020, the European Parliament ratified a free trade agreement (FTA) and an Investment Protection Agreement (PPI) with Vietnam. MEPs (ENPs) voted in favour of the agreements in Strasbourg. Infrastructure projects account for a significant share of public investment in Vietnam. The TFUE urges the parties to respect the general principles of national treatment, non-discrimination and increased transparency of public procurement. The aim is to ensure that EU companies can offer public procurement (goods, services and construction services with some exceptions) on an equal footing with national bidders, taking into account the monetary value thresholds set under the agreement. Nevertheless, TUEFTA authorizes Vietnam to delay the implementation of several specific provisions by ten years and Vietnam`s public procurement obligations are not enforced for five years. At this stage, free trade between the EU and Vietnam is a sign of improved international economic relations.
This cooperation aims to protect the rights of the different actors in both environments by recognising reciprocal norms. It also provides more comfort and less danger for local workers in their daily lives, so they can do their jobs properly and fairly. The agreement allows EU companies to award public contracts, among others, with Vietnamese ministries, including for infrastructure such as roads and ports, major state-owned enterprises such as the electricity supplier and the national rail operator, public hospitals and the two largest Vietnamese cities of Hanoi and ho Chi Min. The free trade agreement will consist of two parts, one for trade and one for investment, covering 95% and 5% respectively. In accordance with the opinion of the European Court of Justice on the EU-Singapore free trade agreement, it will probably be decided that the European Parliament will be solely competent in the trade field because of the European internal market and that, therefore, the trading part will enter into force immediately after ratification by the European Parliament. The investment part requires ratification by the European Parliament and all EU Member States. The effects of the investment part are applied on an interim basis, subject to the completion of the ratification process. Such agreements illustrate the strength of EU-Vietnam relations and the opportunities Europe sees in the Southeast Asian country. The EU is achieving a long-term goal of increasing its influence and expansion in ASEAN markets by targeting Vietnam, and European entrepreneurs will have better access to one of the fastest growing Asian economies when the agreements come into force.