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EU expanding free trade zone

EU expanding free trade zone

At present, the EU authorities are striving to expand a free trade zone beyond European countries. Brussels considers Asian countries to be promising trade partners. On June 30, 2019 the EU made two deals with Vietnam: a trade agreement and an investment protection agreement. For the EU, this is the first step toward large-scale cooperation with a developing Asian country.

Painstaking talks over 10 years eventually ended with the trade deal which gradually slashes tariffs on 99% of mutual imports.

The landmark deal was signed in Hanoi, Vietnam’s capital city. Citing European Commissioner for Trade Cecilia Malmstrom, the EU used to express cautious stance on this Southeast Asian country. In 2016, the amount of foreign investment in Vietnam’s economy was slightly above €8 billion. The new agreement is sure to boost it. The new investment protection agreement will replace all previous ones and will ensure extra safety of EU investment.

Both deals still have to be approved by the European Parliament that could be a complicated thing. EU lawmakers are going to assess all pitfalls.

Besides, the EU and its South American partners have struck a long-awaited trade deal after two decades of talks. The EU and Mercosur, the South American bloc comprising Argentina, Brazil, Paraguay, and Uruguay, agreed on a free trade area. The Mercosur allies aim to eliminate import tariffs over 10-15 years. In return, the EU is due to release the Mercosur partners from most export duties. As a result, EU companies will save nearly €4 billion annually. 


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