The Vietnam-European Union Free Trade Agreement: Victim of Changing Times?

Abstract

The FTA is the EU’s most extensive with a developing state, and represents a cornerstone of Vietnam’s FTA diversification policy. This chapter explains how geo-economic considerations and broader foreign policy objectives encouraged the parties to set differences aside and compromise. It analyses geo-economic motivations of the parties to engage in negotiations and how these have impacted the dynamics, shape and content of the negotiated agreement, focusing in particular on the most controversial aspects of the agreement. It explores changes in domestic and the international situation led to a complex and slow ratification process. Through a longitudinal analysis of documentary evidence supplemented by elite interview materials, this chapter posits that the agreement and the subsequent delay in ratification result from political changes that have taken place since the negotiations were initiated. The agreement reflects the Vietnamese government’s policies of embedding the country in international trade networks and efforts to counter over-reliance on the Chinese market. From a European perspective, the launch of negotiations was influenced by US involvement in negotiations for a Transpacific Partnership. The conclusion and ratification was an important signal to the rest of the world in support of the liberal trading order.