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EU-Vietnam Free Trade Agreement Threatened

Laws & Regulations 3423

BRUSSELS, Belgium – The EU-Vietnam Free Trade Agreement, which is planned to be signed this summer, is threatened. It is running into difficulties as the European Parliament is placing questions at how Vietnam as a one-party Communistic state is treating its workers. This is said to be the forerunner of more to come on workers’ rights in Asia in relation to EU trade agreements.

EU-Vietnam Free Trade Agreement Threatened
EU Parliament’s trade committee chair Bernd Lange ‘With no progress on labour rights deal cannot be ratified.’ – Photo euractiv.com

According to a recent ‘Politico’ report French President Emmanuel Macron triggered the recent worries in EU circles on workers’ rights in Asia. The background for this trend is in the populist movement across Europe that tries to influence public opinion by pointing to the unbridled free trade from Asian sweatshops.

Cheap manufacturing base

What is being said in this regard by the European Parliament’s trade committee chair Bernd Lange, is that it is unfair for big manufacturers to use Vietnam as a cheap manufacturing base, with lower environmental standards, and then export goods tariff-free into the EU.
According to the Politico report he said “Workers are hired and laid off without any security, working times are not respected and workers who fight for fairer conditions have been fired. It cannot be that we drop all tariffs on products and make them even cheaper here, without any improvements for the workers there.”

By the way, workers’ rights and workers’ conditions are (partly) being scrutinized by Corporate Social Responsibility programs handled by individual companies. In the cycling industry the Responsible Sports Initiative has been set-up to handle this collectively. 

‘Deal cannot be ratified’

The objections raised by the European Parliament brings big troubles for Europe’s trade chief Cecilia Malmström and the EU-Vietnam Free Trade Agreement. In particular as Vietnam with its 93 million people economy is seen as one of the Asian tigers on which Bernd Lange says “If there’s no progress on human rights and especially on labour rights, then the deal cannot be ratified by the European Parliament.”

Expanding trade relations across Asia

EU trade chief Malmström is reacting to these warnings with, according to Politico “Diplomatic, consensus-building approach with the Vietnam government for improving workers’ conditions and establishing labor reforms.”

Her actions are closely being followed as the EU is also working on expanding its trade relations across Asia. For that the current deal with South Korea is being revised while negotiations with Indonesia are taking place. Talks with the Philippines have been stopped because of human rights concerns.

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