Vietnam–EU deal to boost trade

The European Union (EU) and Vietnam oil and gas sectors will be given an opportunity to increase their trade through a free trade deal that will remove almost all tariffs on goods bought and sold between them, writes Keith Nuthall.

Under the deal, Vietnam will liberalise 65% of import duties on EU exports once the agreement is ratified, with the remainder phased out over 10 years. EU duties will disappear over seven years. The deal, initialled on 4 August, will also attack non-tariff barriers, reforming import and export licensing and customs procedures. And Vietnam has agreed to ‘substantially improve access for EU companies’ in maritime shipping, insurance, environmental and business services.

These changes could boost the current low level of EU-Vietnam fossil fuel trades – the EU imported just €7mn worth of mineral fuels, lubricants and related materials from Vietnam in 2014, exporting just €9mn that year, according to EU statistical agency Eurostat. 

The EU already admits many Vietnamese oil and gas duty and related products duty free, but some tariffs will go – such as 8% on propane for heating and power production. Vietnam has more duties to scrap – 5% on EU natural gas imports and certain petroleum oils, 3% on petroleum jelly, plus 5% on gas compression modules for oil drilling, and tube casings for oil drilling, for instance.

The Australian government has pledged to cut greenhouse gas emissions by at least 26% by 2030, it was announced last month. Prime Minister Tony Abbott’s government said it hoped to curb emissions by as much as 28% from 2005 levels over the next 15 years, joining other nations in setting a goal ahead of UN climate talks in Paris in December.