Business

Weak Labour Laws Can Hold Up EU-Vietnam FTA

The EU and Vietnam signed the free trade deal in December of 2015. However, the European Parliament and the legislatures of all EU members must approve the agreement for it to take effect. That may be easier said than done. The government in Vietnam faces pressure from European lawmakers to improve its human rights record. The European Parliament recently sent its Subcommittee on Human Rights on a fact-finding trip to Vietnam. The committee called on Vietnamese officials to permit more debate about political rights & freedom of expression and religion. Vietnam is seeking to diversify its markets and reduce dependence on China. The value of trade between EU and Vietnam is estimated at US$ 40 billion. The EU is already Vietnam's third largest trading partner, after the US and China. Vietnam exports a lot of clothing and textile products to Europe, and the trade deal with the EU will help exports after the loss of the TPP. The agreement would end almost all import tariffs between the two sides within seven years. It would also open Vietnam to European services, such as healthcare and packaging.

Greater attention to human rights needed

Nearly one year ago, the French group Worldwide Movement for Human Rights accused the EU of failing to study the effect the trade deal would have on rights. Fredrick Burke of Baker & McKenzie says Vietnam's free trade agreement with the EU is not as strong on human rights as the TPP.