EU parliamentarians endorse Vietnam trade, investment deals
The European Parliament has given the green light to the 27-nation bloc’s trade and investment agreements with Vietnam, over seven years after those negotiations formally began.
The two agreements were initially meant to fall within one single FTA that would include investment provisions. The FTA was agreed in principle in August 2015 and in full later that year, though the investment provisions were later separated out from the main FTA text and built into a new Investment Protection Agreement.
While the EU and ASEAN had originally envisioned negotiating a region-to-region agreement, these efforts were put on hold over a decade ago. The EU has since been negotiating agreements with individual ASEAN member economies, which proponents say could later pave the way for reviving and updating the original EU–ASEAN negotiations. Those efforts have largely slowed, however, with the only talks still active being those between the EU and Indonesia, as well as those between the EU and Myanmar on investment protection.
The entry into force of the EU–Vietnam trade agreement is still pending ratification in Vietnam, along with some final procedures on the EU side. The Investment Protection Agreement, which would replace the 21 BITs that exist between the Southeast Asian country and most of the EU’s member states, will also require the ratification by EU member state and regional legislatures.
The decision to separate out the trade and investment agreements for EU-Vietnam was as a result of the 2017 CJEU ruling that clarified, in the case of the EU–Singapore trade agreement, that certain investment issues fell under the EU’s shared competence with its member states, rather than under the EU’s exclusive competence. This meant that member states and their respective legislatures would need to approve the signature and ratification of agreements featuring those provisions, in addition to the EU Council and Parliament—a process that could significantly slow down the entry into force of the overall trade agreement, or prevent it outright.
The EU and Singapore have also split their agreement into separate trade and investment agreements, with the former in force and the latter still pending member state and regional parliament ratification.