EU Trade Deal May Help Boost Poland-Vietnam Ties

A free trade agreement recently signed by the European Union and Vietnam is likely to accelerate trade between Poland and the Communist southeast Asian nation.

Although they seem like unlikely partners, bilateral trade between Poland and Vietnam surpassed $3 billion last year, while Poland also boasts a large Vietnamese community that form a link between these two vastly different countries 5,500 miles apart.

"Vietnam is one of the most promising markets for Polish companies in Southeast Asia," said Piotr Harasimowicz, chief representative officer of the Polish Investment and Trade Agency in Ho Chi Minh City (formerly Saigon)

On Wednesday, the European Parliament, the legislative branch of the EU, ratified the European Union-Vietnam Free Trade Agreement, or EVFTA, and the EU-Vietnam Investment Protection Agreement, or EVIPA.

The deals remain subject to ratification by the Vietnam National Assembly – which is expected to occur in May 2020.

EVFTA will eliminate almost 99% of customs duties between the EU and Vietnam; and will cut 65% of duties on EU exports to Vietnam while the remaining duties will be phased out over 10 years. Also, 71% of duties will be eliminated on Vietnam exports to the EU, with the remaining duties to be eliminated over seven years.

The EVFTA also includes provisions for intellectual property rights, investment liberalization, and sustainable development.

The agreement also calls for Vietnam to protect the environment, uphold social progress, defend the rights of workers and adhere to the terms of the Paris Agreement on climate change.

Vietnam’s Ministry of Planning and Investment has said that it projects the trade agreement will boost Vietnam’s exports to the EU by 42.7% by 2025. In turn, the European Commission, the executive branch of the EU, expects the deal to expand EU’s GDP by $29.5 billion by 2035.

Vietnam and EU already had deep trading and financial ties.

At the end of 2018, EU had invested more than $23.9 billion in 2,133 projects in Vietnam, mostly in manufacturing, electricity and real estate.

Vietnam is now the EU’s second largest trading partner among all members of Association of Southeast Asian Nations, or ASEAN, having recently surpassed Indonesia and Thailand.

Harasimowicz added that EVFTA will allow European entrepreneurs to participate in infrastructure investments in Hanoi and Ho Chi Minh.

The EU has praised the deal as the “most modern, comprehensive and ambitious agreement ever concluded between the EU and a developing country.” But critics contend it does not truly protect human rights in Vietnam not does it adequately address climate change.

Anna Cavazzini, an MEP and spokesperson on trade for the European Greens/European Free Alliance group, said the agreement “contains special rights for investors, which we reject. Secondly, legally enforceable sustainability standards are still nowhere to be found. In order to achieve our climate objectives, we need a fundamentally different trade policy.”

A group of 28 non-governmental organizations, including Human Rights Watch, Alliance for Independence and Democracy of Vietnam and Christian Solidarity Worldwide, asked the European Parliament not to ratify the agreement with Vietnam.

But Phil Hogan, the European Commissioner for Trade, defended the deal. “Vietnam has already made great efforts to improve its labor rights record thanks to our trade talks. Once in force, these agreements will further enhance our potential to promote and monitor reforms in Vietnam,” he said.

In Poland itself, Vietnamese are now the largest minority after Ukrainians, Germans and Belarusians, with nearly 12,000 holding permanent residency permits. The Vietnamese Embassy in Warsaw estimated that about 20,000 to 30,000 Vietnamese people live in Poland, while the Polish government thinks the accurate number is closer to 50,000. The Vietnamese are concentrated in Warsaw where they own at least 500 Vietnamese restaurants.