EU-Vietnam FTA Enactment Likely After Fall 2019

The EU-Vietnam Free Trade Agreement (EVFTA), which concluded the negotiation in December 2015, is unlikely to take effect before fall 2019. It is reported that EU and Vietnam sign the FTA this week when Vietnamese Prime Minister Nguyen Xuan Phuc visits Europe for the Asia-Europe Meeting (ASEM); however, the human rights situation in Vietnam has stirred arguments against the FTA within EU members.

Once taken effect, EVFTA will eliminate 99% of customs duties over a period of up to 7 years for exports from Vietnam and 10 years for exports from Europe. According to European Chamber of Commerce (Eurocham) in Vietnam, 80% of member companies agree that “the EVFTA is very likely/likely to enhance Vietnam’s competitiveness compared other countries such as China, Japan, Korea and the U.S.”

Meanwhile, some European parliament members and NGOs are concerned about Vietnam’s human rights situation and are opposing EVFTA. The diplomatic relations between Vietnam and Germany/Slovakia deteriorated after the alleged abduction of Mr. Trinh Xuan Thanh, former chairman of state-run Petro Vietnam Construction Corporation (PVC) in Berlin in July 2017 by the Vietnamese intelligence services, and that is another concern for enactment of the EVFTA.

On 10thOctober, the International Trade Committee of the European Parliament (INTA) held public hearing on EVFTA, where Mr. Nguyen Quang A, a human rights expert from Vietnam stated that EVFTA, which requires Vietnam to ratify the three ILO conventions, would improve the human rights situation in Vietnam. “If EVFTA is adopted, EU will have leverage to pressure Vietnam,” he added.

Mr. Quang A’s comment helps EVFTA supporters by lessening concerns over the human rights situation in Vietnam. BBC Vietnam recently reported that Germany would soon start a talk with Vietnam to resume the strategic relationship, which was suspended after Mr. Thanh’s alleged abduction.

As for the EU internal procedure, the text of EVFTA is to be submitted to the Parliament for ratification after spring 2019, and enactment is likely to be after fall 2019. As other agendas are to be prioritized after the EU parliament election next May, the ratification of EVFTA could be further delayed if it’s not realized before next March.

(Akihide Mori, Vietnam watcher)