Spirits trade urges ratification of EU-Vietnam deal

22nd January, 2019 by Amy Hopkins

Spirits Europe has joined a number of trade groups in signing a letter urging the European Union to ratify its free trade agreement with Vietnam, which promises to scrap the country’s 45% import tariff for spirits.

Vietnam will gradually eliminate its 45% import tariff for spirits under its free trade agreement with the EU

Negotiations for the agreement concluded more than three years ago, but progress towards ratification has been slow.

According to Spirits Europe, the market for spirits in Vietnam “remains very challenging” due to the growth of domestic brands. The European spirits industry also faces “increased competition” from regions that have already actioned free trade agreements with Vietnam.

The group said in a statement: “Over the past years, we had to face a sharp increase of the tax burden, creating heavy difficulties for business operations.

“There are no winners under such a scenario: business operators would be faced with little or no perspective for growth, consumers would be far more exposed to dubious and potentially harmful illicit products, and government revenues would be adversely impacted.”

Under the agreement, Vietnam would scrap its 45% import tariff for spirits over the course of seven years and recognise a number of EU geographical indications.

“If the agreement is not approved by the current Council and Parliament, EU businesses risk losing market share in important sectors in Vietnam and harming their competitiveness in the region,” Spirits Europe added.

The trade body and several other US and European associations are calling on Donald Tusk, president of the European Council, and Cecilia Malström, European commissioner for trade, to conclude their legal review of the legislation so it can be ratified by European Parliament before the European elections in May 2019.

“Failure to do so would create uncertainty, send the wrong message to our trading partners, and hurt the EU’s credibility in the global trading community.”

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