According to Reuters, The European Union has signed a free trade deal with Vietnam:

The European Union signed a landmark free trade deal with Vietnam on Sunday, the first of its kind with a developing country in Asia, paving the way for tariff reductions on 99% of goods between the trading bloc and Southeast Asian country.

The article specifies more information, but I cannot find the rationale of such an agreement (i.e. what's in it for the EU?).

Question: Why did EU sign a free-trade deal with Vietnam?

  • 2
    "what's in it for the EU?" Probably: Vietnamese wages are lower than those in China. Jul 2, 2019 at 8:05
  • 7
    @DenisdeBernardy More importantly they are lower than those in France or Germany. I am not sure this is the first EU deal with a "developing country in Asia". The EU certainly has such an agreement with South Korea (but perhaps that's not "developing" any longer). In short "Why did...?", the answer is simply because free trade is a powerful economic motor for both countries. Anyone unclear as to why should post on the economics site.
    – WS2
    Jul 2, 2019 at 8:40
  • 1
    In conjunction to the answers already given, notice that the EU is very prolific in signing trade agreements (likely the biggest trading block today). It's really a matter of policy and it was aptly named The Trade for All strategy. There is a sustainable development component to is, although the effectiveness of these deals in social justice and democracy is yet to be determined.
    – armatita
    Jul 24, 2019 at 15:15

2 Answers 2


The article EU trade pact with Vietnam close to finish line at euractiv.com provides some arguments (emphasis mine):

If they come into force, tariffs on 99% of goods will be reduced over a ten-year period. The high Vietnamese import duties on cars will then fall by 78% and those on wine by 50%.

The European Commission speaks of a 29% boost for EU exports to Vietnam and an 18% in the other direction.

“This is important for the European industry,” Hanns Günther Hilpert from the civil law foundation Stiftung Wissenschaft und Politik told EURACTIV.

Access to supply chains in Southeast Asia should not be neglected – especially as a large number of agreements currently concluded by ASEAN states increasingly marginalise European competitors.


Beyond any economic reasons, signing a trade deal with Vietnam pulls Vietnam closer to the European Union and farther from China. Since China has been actively attempting to recruit countries into its Belt and Road Initiative, the EU may want to counter that with its own program. This is much the same reason as the United States gave for supporting the Trans-Pacific Partnership when Barack Obama was president.

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