By Rory Cahill, borderlex.eu | 30 June, 2014
Crucially, incoming chair of the European parliament’s international trade committee Bernd Lange has previously indicated that he supports the negotiations, but has indicated three areas of concern: animal welfare and the trade in rare species, the involvement of civil society in the process and ensuring that worker’s rights, environmental standards and social standards are addressed.
Vietnam and the EU are hopeful that a free trade agreement between them can be concluded by October this year. But signing the deal could be the easy part, getting the new European Parliament to agree remains a far greater challenge.
The European Union (EU) expects to sign a free trade agreement (FTA) with Vietnam by the end of 2014 but faces a significant challenge in gaining approval from the European parliament for any such deal without major political concessions by the non-democratic South East Asian government.
Announcing €542m in overseas development aid in 2014 for Vietnam this week, Ambassador Franz Jessen, Head of the EU’s delegation in Vietnam confirmed that he expected the deal would be signed by the end of the year.
Trade talks last week marked the eighth round of discussions on the proposed agreement. Key issues still to be resolved include Vietnamese restrictions on foreign ownership, which is limited to 49 per cent in Vietnamese companies. Foreign investors are also calling for more clarity on Vietnamese regulations regarding investment in domestic banks and credit facilities.
Crucially, incoming chair of the European parliament’s international trade committee Bernd Lange has previously indicated that he supports the negotiations, but has indicated three areas of concern: animal welfare and the trade in rare species, the involvement of civil society in the process and ensuring that worker’s rights, environmental standards and social standards are addressed.
However there is increasing scepticism about the deal being agreed this year for a variety of reasons, including the ongoing Trans-Pacific Partnership (TPP) negotiations the US is leading with eleven Asian countries, and to which Vietnam is a party.
Foreign business associations called on the Vietnamese government to speed up negotiations on both the EU deal and TPP at a forum with Prime Minister Nguyen Tan Dung in Hanoi in early June.
There would be major economic benefits to Vietnam of an FTA with the EU. The European Chamber of Commerce in Vietnam estimates that such an agreement would raise Vietnam’s GDP by 15 per cent, spark a rise in exports of 35 per cent and push local wages up by 12 – 13 per cent.
However political considerations in Europe may drag out the implementation of any agreement with Vietnam, regardless of when it is signed. Despite a Partnership and Cooperation Agreement (PCA) between the EU and Vietnam being signed in 2012 when talks on the FTA commenced, the PCA has yet to be ratified by the European parliament and the member states.
Glyn Ford, a former Member of the European parliament, now on the Board of the European Centre for Asian Studies in Brussels, says the PCA could prove to be a major obstacle, particularly if, as expected, the new parliament demands clauses are that allow for the deal to be suspended or abrogated due to political or human rights issues within Vietnam.
Such “suspension clauses” have become a feature of EU FTA negotiations and have often proven contentious. Proponents claim suspension clauses are an excellent lever for improving social and political conditions in developing countries. Even highly developed economies like Japan – which retains capital punishment, deeply opposed by Europe – have been faced with such clauses during negotiations with the EU.
Ford says that the key problem in the EU Vietnam negotiations is going to the PCA. In his view, “the European parliament will never approve an FTA without a parallel PCA, which is the political side for issues like civil society, human rights.”
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July 1, 2014
EU – Vietnam free trade talks: politics and timing cloud prospects for early conclusion
by Nhan Quyen • [Human Rights]
By Rory Cahill, borderlex.eu | 30 June, 2014
Vietnam and the EU are hopeful that a free trade agreement between them can be concluded by October this year. But signing the deal could be the easy part, getting the new European Parliament to agree remains a far greater challenge.
The European Union (EU) expects to sign a free trade agreement (FTA) with Vietnam by the end of 2014 but faces a significant challenge in gaining approval from the European parliament for any such deal without major political concessions by the non-democratic South East Asian government.
Announcing €542m in overseas development aid in 2014 for Vietnam this week, Ambassador Franz Jessen, Head of the EU’s delegation in Vietnam confirmed that he expected the deal would be signed by the end of the year.
Trade talks last week marked the eighth round of discussions on the proposed agreement. Key issues still to be resolved include Vietnamese restrictions on foreign ownership, which is limited to 49 per cent in Vietnamese companies. Foreign investors are also calling for more clarity on Vietnamese regulations regarding investment in domestic banks and credit facilities.
Crucially, incoming chair of the European parliament’s international trade committee Bernd Lange has previously indicated that he supports the negotiations, but has indicated three areas of concern: animal welfare and the trade in rare species, the involvement of civil society in the process and ensuring that worker’s rights, environmental standards and social standards are addressed.
However there is increasing scepticism about the deal being agreed this year for a variety of reasons, including the ongoing Trans-Pacific Partnership (TPP) negotiations the US is leading with eleven Asian countries, and to which Vietnam is a party.
Foreign business associations called on the Vietnamese government to speed up negotiations on both the EU deal and TPP at a forum with Prime Minister Nguyen Tan Dung in Hanoi in early June.
There would be major economic benefits to Vietnam of an FTA with the EU. The European Chamber of Commerce in Vietnam estimates that such an agreement would raise Vietnam’s GDP by 15 per cent, spark a rise in exports of 35 per cent and push local wages up by 12 – 13 per cent.
However political considerations in Europe may drag out the implementation of any agreement with Vietnam, regardless of when it is signed. Despite a Partnership and Cooperation Agreement (PCA) between the EU and Vietnam being signed in 2012 when talks on the FTA commenced, the PCA has yet to be ratified by the European parliament and the member states.
Glyn Ford, a former Member of the European parliament, now on the Board of the European Centre for Asian Studies in Brussels, says the PCA could prove to be a major obstacle, particularly if, as expected, the new parliament demands clauses are that allow for the deal to be suspended or abrogated due to political or human rights issues within Vietnam.
Such “suspension clauses” have become a feature of EU FTA negotiations and have often proven contentious. Proponents claim suspension clauses are an excellent lever for improving social and political conditions in developing countries. Even highly developed economies like Japan – which retains capital punishment, deeply opposed by Europe – have been faced with such clauses during negotiations with the EU.
Ford says that the key problem in the EU Vietnam negotiations is going to the PCA. In his view, “the European parliament will never approve an FTA without a parallel PCA, which is the political side for issues like civil society, human rights.”