Sunday witnessed a significant event in the world economic market with the signing of a trade deal between the European Union and Vietnam. The deal is a step forward by the former pledging support to Vietnam in the light of rising trade tensions the world over. 

The deal’s signing ceremony took place in Hanoi between Cecilia Malmstrom, Chief Trade Negotiator for EU and Tran Tuan Anh, Trade Minister, Vietnam. Incidentally, only two days before the trade deal in question, the EU had announced plans to seal another free trade deal with four countries in South America.

The major highlight of the EU-Vietnam deal is being seen as the removal of 99% tariffs on goods and services traded between the two respective markets. However, certain tariffs are expected to be gradually eliminated over the next decade, while certain agricultural produce is likely to be restricted to the quota system.  

Malmstrom announced the deal in a statement that said, “This is a strong statement for open, rules-based trade and another important agreement for the EU in South East Asia.” Meanwhile, her counterpart Anh declared the agreement as a “historic moment.”

Flashback

The EU and Vietnam had begun trade talks in 2012 but arrived at negotiations 6 years later in 2018. The current deal and yet another announced by the EU two days back seems to have come as EU’s reaction to the failure of trade talks with the US in the latter part of 2016. 

Following this event, the newly elected Trump administration had pledged to support its own workers and goods. It was then that the EU decided to enter into free trade deals with a number of countries the world over, such as the one now with Vietnam and another much bigger in the pipeline with four South American nations.

Jean-Claude Juncker, President European Commission, confirmed during the G-20 Summit in Japan on Saturday that the organization had sealed trade deals with 15 countries during his 5-year tenure.“Today, Europeans benefit from open trade with 72 countries.” He said. “We need the G20 to improve economic cooperation between us.”