EU signs trade agreement with Vietnam
On 30 June, the EU signed a trade agreement with Vietnam. This comes just two days after the EU closed the deal on the Mercosur agreement.
The new agreement with Vietnam will remove nearly all tariffs on goods on both sides. The European Parliament still needs to approve the deal, before it can come into force. The EU hopes this will be before the end of the year
Vietnamese trade is estimated to be worth €47.6 billion a year. Under the new agreement, Vietnam will remove 65% of duties on EU exports with immediate effect, with the rest removed over a 10-year period. Vice versa, EU duties on Vietnamese exports will be eliminated over a 7-year period. The asymmetric approach accounts for the fact that Vietnam is still a developing country.
Currently, Vietnam has a 16% tariff on EU pork. The tariff on frozen pork will be removed over a 7-year period. So far this year (year to April), EU exports of pork and pig offal have increased by nearly 80% on the year, to 29,000 tonnes. The majority (64%) of exports are frozen offal products, with frozen pork making up the rest of the shipments.
The prospect of increased exports of pork from the EU comes at a key time for Vietnam. The nation is suffering from a widespread outbreak of African swine fever. Vietnam has already culled 2.8 million pigs (10% of its herd) to try to contain the disease. It is likely that the nation will increase its reliance on imports as its domestic pig production continues to suffer.
It is unlikely that the UK market will be able reap the long-term benefits of this deal, as the agreement will only apply while the UK is an EU member. Although, if a withdrawal agreement is agreed, the UK will be able make use of the agreement during any transition period. The UK could try to negotiate with Vietnam on its own terms, though this would probably take some time.