This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
EU-Vietnam free trade deal raises industry spirits
The EU and Vietnam have agreed an FTA which paves the way for the elimination of Vietnam’s 45% import tariff for spirits, along with strengthened GI recognition in the country.
The EU and Vietnam have agreed a free trade deal, the first of its kind between the trade bloc and a developing country.
The agreement, described by EU trade commissioner Cecilia Malmström and Vietnamese minister of industry and trade Vu Huy Hoang as a “mutually beneficial and balanced package”, will see Vietnam liberalise wine and spirits imports over a seven-year period, in addition to eliminating tariffs across most types of product.
Legislation has also been introduced to recognise and protect products with Geographical Indications (GIs) imported into Vietnam – for example, Scotch whisky.
Spirits Europe and the Scotch Whisky Association (SWA) have both welcomed the deal.
Vietnam is a high growth market for European spirits producers, having witnessed a 730% increase in exports over the last decade, from €5m in 2004 up to €42m in 2014, explained Spirits Europe. Nonetheless, said Paul Skehan, director general, “the full potential of the market, fuelled by the country’s sustained economic growth and dynamic demographics, has yet to be unleashed.
“Imported products represent only 19% of the Vietnamese market and the agreement just concluded between EU and Vietnam will lift the barriers that were an obstacle to grow EU market share.”
The organisation praised the move to strengthen intellectual property rights and GIs, adding that the FTA will improve the business environment in Vietnam.
“We thank the European Commission for the hard push towards an ambitious outcome of the FTA on tariff liberalisation, protection of GIs and issues of licensing and we invite the European Parliament to ratify the EU-Vietnam FTA as quickly as possible” concluded Skehan.
The SWA said it sees the move as an expansion opportunity. David Frost, chief executive, said: “Vietnam is a growing market for Scotch whisky. We welcome the country’s FTA with the European Union, which should encourage our future expansion.
“Last year direct exports of Scotch to Vietnam totalled £3.5 million, up more than 9% on the previous year. However, there were issues to be addressed in the market, including the 45% import tariff on spirits. The FTA will help as it will gradually phase out the tariff and it will tackle other trade restrictions.”
The FTA is the first deal of its kind between the EU and any developing country. It is the second such deal with an Association of South East Asian Nations (ASEAN) member, following the FTA agreed with Singapore in 2014.
The EU has the ultimate objective of establishing a region-to-region FTA with ASEAN as a whole.