Vietnam ratifies significant trade deal with European Union

HANOI, Vietnam (AP) — Vietnam on Monday ratified a significant trade deal with the European Union, which is expected to boost the country’s manufacturing sector and exports, as it recovers from a dip caused by the coronavirus pandemic.

Lawmakers approved the agreement as they met in the National Assembly for the first time since the pandemic began. The deal was signed in Hanoi last June and was ratified by the European Parliament in February.

When it takes effect next month, the EU will lift 85% of its tariffs on Vietnamese goods, gradually cutting the rest over the next seven years. Vietnam will lift 49% of its import duties on EU exports and phase out the rest over 10 years.

The implementation of the EU-Vietnam Free Trade Agreement "can’t come at a better time for Vietnam when it’s on the path of economic recovery after several months of closure due to COVID-19,” said economist Pham Chi Lan, former adviser to several of Vietnam’s prime ministers.

Vietnam prioritized public health and safety when the coronavirus started to peak in China. It closed the border with China in January and with the world in February while imposing a social shutdown that lasted until the end of April. The tough measures contained Vietnam's outbreak to just over 300 cases with no deaths and no local infections have been reported for almost two months.

Still, its economy has dipped because of the illness and containment measures elsewhere, and the manufacturing sector has been hit by restrictions in the movements of goods and people.

The pandemic revealed shortcomings in its manufacturing sector. While Vietnam's own factories were safe to open, they could not operate because they sourced their materials from China, particularly for major export products in textiles, footwear and...