spiritsNEWS February 2020

A Toast to free trade – with Vietnam!

The European Parliament’s approval of the EU-Vietnam free trade agreement is an important and highly welcome step. Once ratified by the National Parliament of Vietnam, the #EVFTA is set to enter into force by early summer. For Europe’s spirits sector, the expected benefits are plentiful: the 45% tariffs on European spirits will be dismantled over seven years, and our main Geographical Indications (GIs) will be protected (Armagnac, Calvados, Cognac, Brandy de Jerez, Scotch Whisky, Irish Cream Liqueur, Irish Whiskey, Swedish and Polish Vodka). On a similar note, a number of Vietnamese GI products that Vietanm has developed alongside the European GI approach, will equally be protected by the agreement.

EU Trade Commissioner Phil Hogan and the Parliament’s Rapporteur, Mr. Geert Bourgeois MEP, rightly underlined that the agreement goes well beyond economic benefits for consumers, workers, farmers and businesses, pointing out that such FTAs can be a force for good in the widest sense. With an FTA like this, Europe is taking the lead on rules-based trade and is using its unique leadership position to push EU standards on safety, labour, environment and human rights as reference points across the world. We should be proud of the fact that trade agreements can act as a geopolitical leverage for the EU and be wary of cals for a “repli sur soi”. To be sure, trade deals aren’t perfect, and they can and will not solve all issues for the better. But they are powerful in influencing positively the course of future developments in other countries. And what is the alternative scenario? No deal? And missing out while other trading partners with less ambitions on social, environmental and human rights standards are rushing in to sign deals with Vietnam? Hardly a convincing perspective…

The #EVFTA comes one year after the entry into force of the agreement with Singapore, a crucial country for our business in South East Asia (important logistic hubs to supply the region). With both deals signed, we have the clear expectation from the Commission to strive for additional deals with other ASEAN countries. Trade Ministers will meet on 12 March, and we look forward to a green light to resume the negotiations with Thailand. An agreement with Indonesia would also be important to eliminate the 150% tariffs currently in place and solve a number of pending export issues.

Allow me to conclude with a final call to the European Commission: let’s make this deal work! As with other FTAs, enough resources should be dedicated to support companies – large and small – to make the most out of the agreement and to monitor a strict enforcement of the rules. Good trading rules are worth little if they aren’t properly policed and enforced!

Ulrich Adam*
Director General


*In his capacity as permanent representative of SPRL ADLOR Consulting

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