EU-Vietnam trade and investment agreements hang in air amid Vietnam's human rights record

The European Commission submitted for approval on Wednesday a free trade agreement with Vietnam, its first comprehensive open markets deals with a developing Asian country.

The EU-Vietnam trade and investment agreements will need approval from the EU's 28 members and from the European Parliament, some of whose members have expressed concern over Vietnam's human rights record.

The parties have agreed on a related accord to promote democracy and human rights, including commitments, dialogue and possible sanctions. EU Trade Commissioner Cecilia Malmstrom said no one denied there were human rights problems in Vietnam.

"We are talking openly about this with our Vietnamese counterparts and the trade agreement will not make Vietnam a fully fledged democracy overnight. It is one tool in the toolbox that we have in relations with Vietnam and other countries," she told a news conference.

The European Union will sign a trade deal on Friday with Singapore, another member of the Association of Southeast Asian Nations (ASEAN), and is in talks with Indonesia.

It is unclear whether the European Parliament, which is expected to debate and vote on the Singapore agreement as well as the EU-Japan free trade deal, will have time to pass the Vietnam accord before EU elections in May.

The trade deal would eliminate 99 per cent of all tariffs, although some staged over a time period and some, notably agricultural products, limited by quotas.

Vietnam, for example, would cut its duty on EU car imports from 78 per cent to zero over 10 years and for wines and spirits, from around 50 per cent, over seven years. EU companies would also be able to bid for Vietnamese public contracts.

In return, the European Union would take seven years to eliminate its duties on certain Vietnamese products, such as its major textiles, clothing and footwear exports.

Vietnam has pledged to protect 169 European food and drinks products, such as champagne or Parmigiano Reggiano cheese, meaning such names could only be used for EU imports.

The agreement includes a chapter on sustainable development, such as implementing international standards on labour rights and the Paris climate accord.  

(With inputs from agencies.)