European Parliament ratifies Free Trade Agreement with Vietnam

On 12 February 2020, the European Parliament (EP) ratified the EU-Việt Nam Free Trade Agreement (EVFTA) and the EU-Việt Nam Investment Protection Agreement (EVIPA). According to the European Union, this is the ‘most modern and ambitious agreement ever concluded between the EU and a developing country.’

Under the EVFTA, Vietnam will cut 65% of import tax on EU commodities when the deal takes effect in 2020, while the remainder will be removed over a 10 year period. Meanwhile, the EU will cut more than 70% of tariffs on Vietnamese commodities from 2020, while the remainder will be abolished in the seven subsequent years. The EU is set to be one of the biggest beneficiaries of the EVFTA following its ratification.

The trade agreement includes a Trade and Sustainability Development (TSD) chapter which, among others, lays out commitments towards improving labour rights. Even though Vietnam has made significant progress in the process of its recent labour code reform, serious challenges remain, mostly related to freedom of association and ensuring sustainable wage increases. Vietnam Civil Society Organisations and lawmakers have voiced concern over the monitoring of labour rights, since the mechanism of the Trade and Sustainability chapter seems to lack effective enforcement strategies to ensure commitments are upheld.

In the framework of the Strategic Partnership for Garment Supply Chain Transformation, Fair Wear and CNV Internationaal have been actively advocating for improvements of the Vietnamese Labour Law in the area of living wages, social dialogue and gender equality. With trade agreement, the Strategic Partnership will continue to raise awareness and build the capacity for new industrial relations systems. ‘Trade unions and independent civil society organisations must be represented in the so-called Domestic Advisory Group in order to ensure action when the commitments are not effectively implemented and labour rights are violated,’ says Annabel Meurs, Fair Wear Country Manager, Vietnam.

Fair Wear has been active in Vietnam since 2006 and works with nearly 30 member brands in 200 active factories there. The trade agreement will further enable Fair Wear and its member brands to purchase goods responsibly, enabling an environment where labour rights are respected and showing how human rights can be ingrained in business practices. 

Read more about Fair Wear’s work in Vietnam here.