Vietnam and European Union reach free trade agreement

BRUSSELS, Aug. 5 (UPI) -- Vietnam and the European Union have agreed to a free-trade deal that would remove nearly all tariffs on imports between the two partners.

The deal is scheduled to take effect in late 2017 or early 2018 and is similar to a trade agreement between the EU and Singapore, the BBC reported Wednesday.

Annual trade between the two partners was worth $30 billion. Vietnam exports consumer electronics and textiles to Europe and the EU exports electrical machinery, aircraft, vehicles and pharmaceuticals to Vietnam.

Hanoi has agreed to liberalize 65 percent of import duties on EU exports – then gradually do away with all other tariffs in a 10-year period.

The deal follows two and a half years of negotiations and was completed ahead of a final agreement on the Trans-Pacific Partnership that could bring reforms to trade among 11 nations in the Asia-Pacific, The Wall Street Journal reported Tuesday.

EU Trade Commissioner Cecilia Malmstroem said the deal includes clauses to protect workers' rights and ensure sustainable management of raw materials.

"Over 31 million jobs in Europe depend on exports, so having easier access to a growing and fast-developing market like Vietnam, with its 90 million consumers, is great news," Malmstroem said, the BBC reported.

"Vietnam's exporters [also] will now get much easier access to the EU for their products, giving an important boost to the Vietnamese economy."

On Wednesday, Britain's Scotch Whisky Association said it welcomed the free trade agreement and that the deal should boost whisky exports to Vietnam when Hanoi's 45 percent import tariff on spirits is lifted.

"Vietnam is a growing market for Scotch whisky," said David Frost, chief executive of SWA.