Following the signing, the agreements will be submitted to the Vietnamese National Assembly for ratification and, on the EU side, to the European Parliament for approval, as well as to the respective national parliaments of EU member states in the case of the investment protection agreement. Finally, the new agreement is a good opportunity for Spanish companies based in other countries who wish to relocate their factories to export to Europe without tariffs. “It`s a relocation process that`s been going on for several years because the cost of labor in Vietnam is about half what it is in China, and now it`s going to accelerate,” Says Fernandez-Cuervo. On 8 June 2020, the National Assembly of Vietnam unanimously ratified the new free trade agreement between Vietnam and the European Union (“TFUE”) and the UE-Vietnam Parallel Agreement on Investment Protection (EUVIPA). It was preceded by the approval of both agreements by the European Parliament on 12 February 2020. The TFUE came into force on 1 August 2020. EUVIPA, which falls under the shared competence1 of the EU and its member states, is currently being nationally ratified by the regional and national parliaments of the EU Member States. The TFUE is discussed below. We will treat EUVIPA separately if this agreement is ratified and enters into force.
The agreement provides for overall preferential treatment for both goods and services, recognition and protection of geographical indications for more than 200 products, liberalisation of procurement rules and obligations on cartels and mergers. It also contains provisions on sustainable development, including legally binding provisions on climate, labour and human rights. This is therefore the most comprehensive agreement to date between the European Union and each ASEAN member country. Singapore has been welcomed since the signing of its free trade agreements. These agreements have helped local businesses and investors access overseas markets, move their products faster and easier, and benefit from tariff concessions, preferential access to certain sectors and protection from mental protection. According to a study by Singapore`s Ministry of Trade and Industry, free trade companies have saved about $730 million in tariffs and bilateral trade has increased by $9.7 million and bilateral investment has increased 26-fold.