EU seeks more Asia trade deals after Vietnam pact

EU seeks more Asia trade deals after Vietnam pact

Singapore agreement also set for sign-off in show of intent to fight protectionism

Brussels has approved a trade agreement with Vietnam in the latest sign of how the EU is trying to strike deals to fight a growing climate of protectionism.

Cecilia Malmstrom, the EU’s trade commissioner, said Europe was determined to deepen commercial ties with Asia, saying the deal and a similar agreement with Singapore would move the bloc closer to a broader regional trade pact with south-east Asia.

The deal with Vietnam was the “most ambitious agreement we have ever made with a developing country”, Ms Malmstrom said.

“It sets the standard,” she said. “It is a very important stepping stone for whatever we do in the region.”

The European Commission’s approval of the deal, which must now be ratified by other EU bodies including the European Parliament, is intended to send a signal of the union’s trade ambitions ahead of a summit of leaders from 51 EU and Asian countries in Brussels this week.

The summit will include talks between the EU and the Association of Southeast Asian Nations, which brings together 10 countries including Thailand, Vietnam, Singapore and the Philippines.

The EU will also this week give its final signature to a trade deal with Singapore, which has already been negotiated and ratified. Ms Malmstrom said both deals would help in “paving the way” to a potential EU-ASEAN trade pact.

Talks on such a “region-to-region” deal have been on hold since 2009, after it was judged that faster progress could be made with bilateral deals between the EU and individual countries.

Reviving the talks with ASEAN is something that is “not immediately around the corner, but it is definitely a goal that we have”, Ms Malmstrom said.

The EU is trying to cement trade ties to send a signal of intent at a time when protectionist sentiment is rising in the US and elsewhere. In the past two years the bloc has also brokered a major deal with Japan, updated its agreement with Mexico and started talks with Australia and New Zealand. It is also in an advanced stage of negotiations with the South American Mercosur trade bloc.

The EU-Vietnam deal will eliminate 99 per cent of customs duties on bilateral goods trade, which is worth €47bn a year. Some Vietnamese tariffs, including on cars parts, meat and dairy products, will be phased out over periods of up to 10 years.

The agreement also removes some regulatory and other non-tariff barriers to EU car exports and provides intellectual property protection for specialities produced within the EU such as Roquefort cheese.

The two sides also struck a separate deal on safeguarding the rights of foreign investors, which needs approval from national parliaments throughout the EU.

Ms Malmstrom called for the texts to be ratified “swiftly”, saying the trade pact would also “help spread European high standards” of labour law and environmental protection, as well as “create possibilities for in-depth discussions on human rights”.

While the EU this year appeared to be headed for a trade war with the US over tariff threats from President Donald Trump, relations have shifted markedly since July, when the EU and US agreed on plans to deepen commercial ties, including talks on eliminating tariffs on industrial goods other than cars.

The Trump administration this week told Congress that it intended to launch formal trade talks with the EU and Japan, as well as with the UK “as soon as it is ready” after Brexit.

Ms Malmstrom underlined on Wednesday that “the UK cannot negotiate any trade agreement as long as they are a member of the EU”.

“We see this as merely preparations being made by the US to negotiate with them and others,” she said.