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RELATIONS WITH THE EU

The European Union and Vietnam

Since 1990 Vietnam and the European Union have worked in close cooperation in many areas. The collaboration covers many different topics such as, amongst others:

  • Economic development 
  • Trade 
  • Sustainable and green economy 
  • Peace keeping

The fruitful collaboration between Vietnam and the European Union has resulted in many formal bilateral agreements between the two partners. As such, Vietnam is a solid partner of the European Union in Southeast Asia. 

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Political Relations

Since establishing diplomatic ties in October 1990, Vietnam has become one of the EU's main partners in the region, with the highest number of agreements of any country in South East Asia. The EU and Vietnam have established cooperation in areas concerning political issues, peace and security, global challenges, trade and development. 

Established in 1996, the EU's diplomatic representation in Hanoi has aimed at: 

  • Supporting Vietnam's sustainable economic development and improvement of the living conditions of the poor. 
  • Encouraging Vietnam's integration into the global economy via trade and support of socio-economic reforms. 
  • Supporting Vietnam's transition into an open society based on good governance, rule of law and respect for Human Rights. 

After the establishment of diplomatic ties, and the opening of the European Commission Delegation (as it was then known), the next important milestone in the EU-Vietnam bilateral relations was the signing of an EU-Vietnam Framework Cooperation Agreement (FCA) in 1995 that entered into force on 1 June 1996.  The FCA defined the terms and broadened the EU's relationship with Vietnam beyond the humanitarian dimension of the early years. 

In 2012, the signing of the EU-Vietnam Framework Agreement on Comprehensive Partnership and Cooperation (PCA) marked the EU's commitment to strengthen and broaden the scope of the mutually beneficial partnership with Vietnam. The PCA, which entered into force in 2016, broadens EU-Vietnam cooperation scope in the areas of trade, environment, energy, science and technology, good governance, human rights, as well as tourism, culture, migration and the fight against corruption and organized crime. 

By incorporating the EU and its Member States, the PCA provided an opportunity for increased coherence and synergy between EU and Member State policies. It allows high-level discussions on political, trade, economy and development issues, as well as on the implementation of EU cooperation programmes. As a result, the annual EU-Vietnam enhanced Human Rights Dialogue and the EU-Vietnam Political Consultations at Vice-Ministerial Level were established in order to implement some key aspects of the PCA. 

On security matters, Vietnam and the EU signed a Framework Participation Agreement (FPA) on 17 October 2019 to strengthen bilateral security and defence cooperation. Under this agreement, Vietnam contributes to the EU peacekeeping mission in the Central African Republic, with two officers currently posted in Bangui.

Vietnam is also among the first six pilot countries of the FPI-funded Project Enhancing Security In and With Asia (ESIWA), which aims at fostering more concrete cooperation in areas such as maritime security, crisis management and cyber security in line with the EU’s Indo-Pacific Strategy. For example, over the past two years ESIWA has been supporting the deployment of an EU military expert in peacekeeping operations embedded in the Vietnam Department of Peacekeeping Operations in Hanoi under an agreement with the Vietnamese Ministry of Defense.

The EU is stepping up its strategic engagement with the vital Indo-Pacific region. The region’s growing economic, demographic, and political weight makes it a key player in shaping the rules-based international order and in addressing global challenges. With this new strategy and the worldwide Global Gateway initiative, the EU aims to contribute to the region’s stability, security, prosperity and sustainable development, in line with the principles of democracy, rule-of-law, human rights and international law. With its geo-strategic location and dynamic economy, Vietnam is a key partner for the implementation of the Indo-Pacific strategy.  

Vietnam is a key member of ASEAN and an important partner for the EU in its relations with the Southeast Asian block, supporting the upgrading of EU-ASEAN relations to a Strategic Partnership in 2020.

The closeness of our relations was evident during the Covid-19 crisis when "Team Europe" supported Vietnam with 19 million doses of vaccines and 19 million EUR in direct financial support to the State Treasury.

Vietnam also benefited from a 20 million EUR regional project to support the health system capacity and from various NGO projects, with a contribution of EUR 2.2 million to help vulnerable communities cope with the impact of COVID-19.

Finally, on December 2022, Vietnam together with the European Union, the G7, Denmark and Norway resolved to establish a Just Energy Transition Partnership (JETP) to support Vietnam's transition towards a net zero future. This partnership insists on the importance for the transition to be just and equitable and requires therefore regular consultation, including with media, NGOs and other stakeholders so as to ensure a broad social consensus and build a global energy transition that does not leave anyone behind. The JETP Political Declaration recognises the importance of civil society and NGO participation in the process of the clean energy transformation in Vietnam, as well as the role of research institutes and other non-state actors such as the private sector.

Further information on EU-Vietnam political relations can be found in the following links: 

  • The signing ceremony of the EU-Vietnam Free Trade Agreement

    Signing Ceremony for the EU-Vietnam Free Trade Agreement.

Trade and Investment

Vietnam is the EU's 15th trade in goods partner and the EU's largest trading partner in the Association of Southeast Asian Nations (ASEAN) in 2020. Many trades and investment-related documents and general information are available here. Vietnam is one of the most dynamic economies in the region that has enjoyed an average growth rate of its economy in between 6-8 percent over the last decade. In 2020, official numbers suggest that Vietnam is one of the most resilient economies in the region with an expansion of 2.9 percent. 

The entry into force of the Free Trade Agreement between the European Union and Vietnam (EVFTA) in August 2020 is a milestone in the bilateral economic relationship. The EVFTA text is available in all EU official languages here. 

With an average per capita income of US$ 2715, Vietnam is now a lower-middle-income country. It starts constituting an important market of 100 million inhabitants that have increased the purchasing power to afford European quality products. At this moment, the main products of EU exports to Vietnam include boilers, machinery and mechanical products, electrical machinery and equipment, pharmaceutical products, aircraft and a yet very limited number of motor vehicles. European food and beverages as well as high-value luxury products also are increasingly important trade items. Vietnam's main exports to the EU are telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture.  

Mainly due to the pandemic of Covid-19, the two-way trade shrank by -5.5% to €43.2 billion, according to the Eurostat, or -13.6% to US$49.5 billion according to Vietnam’s General Statistics Office.  

After 25 years of continual growth, in 2020 for the first time, Vietnam’s exports to the EU declined slightly (-0.3%). Vietnam's exports to the EU continued to account for almost two-thirds of the total figure (€34.4 billion). The full implementation of the FTA is expected to open many opportunities for producers and distributors on both sides of every size, including small and medium enterprises. 

In 2020, the EU constituted the third most important overseas market for Vietnamese products. The continuous surplus of €25.6 billion that Vietnam enjoys with the EU significantly helps to balance Vietnam's huge trade deficits with China and South Korea.

The EU purchased as much as 12% of the country's global exports in 2020.  

A concise and still complete statistical overview on key indicators relevant for trade in goods and services, as well as foreign direct investments, is accessible here. 

  • Vietnam EVFTA Training Workshop

    A capacity building workshop (March 2023) on Effective Implementation of Rules of Origin under EVFTA, targeted at Foreign Trade officers and Certificate of Origin issuing authorities.

Free Trade Agreement and Investment Protection Agreement

The EU-Vietnam Free Trade Agreement (EVFTA) and the Investment Protection Agreement (IPA) are modern and comprehensive deals. Whilst the EVFTA has been in force since August 2020, the EU Member States still need to ratify the IPA before it can enter into force. The full text of the two agreements are available here.

EU-Vietnam Free Trade Agreement (EVFTA)

The EVFTA eliminates close to all tariffs, reduces regulatory barriers and bureaucratic red tape, protects graphical indications, provides additional opportunities in services and public procurement markets. 

Practical Guides explain specific aspects of the EVFTA in clear and simple language and can be found here.  A comprehensive guide (updated in 2019) to the EVFTA is available here. The “Access2Markets” portal is designed for EU exporters, in particular SMEs. It provides detailed information on applicable tariffs, rules of origin, product requirements, customs procedures and formalities, VAT/excise duties/sales taxes, trade barriers, and trade statistics. It is accessible here and is available in all 24 official EU languages. 

Intellectual Property Rights

As part of the IPR protection, the EVFTA ensures the protection in Vietnam of European Union Geographical Indications (GIs). Recognition and high level of protection (direct) of GIs comparable level to the one under the EU GI legislation. 167 EU GIs and 39 Vietnamese products are already included in the EVFTA, representing EU flagship agricultural products, such as Champagne, Parmigiano Reggiano cheese, Rioja wine, or Roquefort cheese Vietnamese GIs too are recognized and protected in the EU, such as Mộc Châu tea or Buôn Ma Thuột coffee. 

The South-East Asia IPR SME Helpdesk provides free information and services on Intellectual Property Rights (IPR) and related issues, as well as training, materials and online resources. This IPR SME Helpdesk supports EU enterprises to protect and enforce their intellectual property rights in or relating to Southeast Asian countries. 

Trade and Sustainable Development

Trade and Sustainable Development are an integral part of the EVFTA. Chapter 13 of the EVFTA covers labour and environmental matters relevant to trade relations between the EU and Vietnam. Commitments to the Core Conventions of the International Labour Organisation (ILO) ensure the respect of fundamental workers' rights by both parties. The chapter promotes activities to address climate change and supports the conservation and sustainable management of natural resources (including wildlife, forestry, and fisheries). The chapter also pays attention to Corporate Social Responsibility and fair and ethical trading schemes. 

The EVFTA sets up a dedicated structure to ensure the full implementation of chapter 13, including mechanisms to allow for the involvement of independent economic, social, and environmental stakeholders through Domestic Advisory Groups both in the EU and in Vietnam. 

Foreign Direct Investment

The European Union is only the sixth important sources of foreign investments (FDI) for Vietnam. According to the Foreign Investment Agency of the Vietnamese Ministry of Planning and Investment, investors in the EU injected a total FDI stock of more than US$27.8 billion into 2,450 projects over the course of the past 30 years (by the end of 2022).  More than 60 per cent of total investment are made in the manufacturing sector. Both IPR protection and enforcement and sustainable development conditions are crucial elements for the attraction and retention of FDI from the European Union. Increased EU investments will allow Vietnam to better integrate into global value chains, thereby diminishing the dependence of Vietnam on its current main investors. EU investors are bound by the highest standards for workers' rights and environmental protection, thereby contributing to the wellbeing and further development of the Vietnamese society and economy.  

EU-Vietnam Protection Agreement

The market access dimension for foreign direct investment is already fully covered in the EVFTA. In addition, the Investment Protection Agreement, once fully ratified, includes modern rules on investment protection enforceable through the novel Investment Court System whilst ensuring that the right of the governments on both sides to regulate in the interest of their citizens is preserved. The EVIPA will replace the bilateral investment agreements that 21 EU Members States currently have in place with Vietnam. 

Further contacts for businesses

In addition to Member States embassies and national business associations, the European Chamber of Commerce may also be available for specific information on Vietnam.

Useful links for Traders
  • Electricity supply via submarine cable to the Nhon Chau Island in the southern province of Binh Dinh through the EU-funded project

    Electricity supplied via submarine cable to the Nhon Chau Island in the South Central province of Binh Dinh through an EU-funded project.

Development Cooperation

The European Union (EU) has supported Vietnam’s efforts towards poverty reduction, sustainable development and integration into the world economy. Since 1990, the EU has provided Vietnam with substantial grants for specific projects and programmes.  

The EU development policy is enshrined in the European Consensus on Development, adopted in May 2017. This ambitious collective European development policy addresses in an integrated manner the main focus points of the 2030 Agenda: people, planet, prosperity, peace and partnership.

Global Gateway Strategy

In December 2021, the EU launched its new Global Gateway Strategy, which stands for sustainable and trusted connections that work for people and the planet. It helps to tackle the most pressing global challenges, from fighting climate change, to improving health systems, and boosting competitiveness and security of global supply chains. It is the new overarching European strategy to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world.

Between 2021 and 2027, Team Europe, meaning the EU institutions and EU Member States jointly, will mobilise up to €300 billion of investments for sustainable and high-quality projects, taking into account the needs of partner countries and ensuring lasting benefits for local communities. This will allow EU’s partners to develop their societies and economies, but also create opportunities for the EU Member States’ private sector to invest and remain competitive, whilst ensuring the highest environmental and labour standards, as well as sound financial management. It is in line with the commitment of the G7 leaders from June 2021 to launch a values-driven, high-standard and transparent infrastructure partnership to meet global infrastructure development needs. The Global Gateway is also fully aligned with the UN’s Agenda 2030 and its Sustainable Development Goals, as well as the Paris Agreement.

The Global Gateway is the EU’s contribution to narrowing the global investment gap worldwide. In this context, the EU is using an ever-growing share of its non-reimbursable grants to boost development related investments, aiming to address risk, capacity, affordability or regulatory constraints.

The European Fund for Sustainable Development Plus (EFSD+) is the main financial tool to mobilise investments under the Global Gateway Strategy, seeking to increase the financial leverage and transformational impact of its cooperation. This innovative instrument generates investments through guarantee capacity and blending grants, and represents a major source of climate finance.

Partnership and Cooperation Agreement

Within the context of the objectives of the Global Gateway Strategy, EU development cooperation is implemented in Vietnam in the framework of the EU-VN Partnership and Cooperation Agreement (PCA). The PCA, in force since 2016, broadens the EU-Vietnam dialogue and cooperation scope in the areas of multilateralism, international security and defence, trade, environment, energy, science and technology, good governance, human rights, as well as, tourism, education, culture, migration and the fight against corruption and organized crime.

Priorities of development EU-Vietnam Development Cooperation

Following substantial consultations with Government authorities, private sector, civil society and a wide range of international partners of Vietnam, the EU adopted a new Multiannual Indicative Programme covering 7 years in 2021. The Multiannual Indicative Programme 2021-2027 states three priority areas:

  1. Climate-responsive digital circular economy;
  2. Responsible entrepreneurship and enhanced skills for decent employment;
  3. Strengthening governance, rule of law and institutional reform.

The overall indicative amount to be provided to support the development of Vietnam in the above sectors during the initial period 2021-2024 is EUR 210 million in grants.

Prior to the current programme, the Multiannual Indicative Programme 2014-2020  has contributed to Viet Nam's socio-economic development particularly by developing a sustainable energy sector and by strengthening governance and the rule of law. 

Currently, the main areas of ongoing support funded from the earlier and the current 7-year programmes, cover a variety of areas of support, including among others energy transition, climate action and green sustainable development, economic governance including public finance management, digital transformation, and the promotion of rule of law and access to justice.

Programmes, which are currently being prepared, envisage to support the promotion of women-led green partnerships, enhancing decent work and technical and vocational education and training, improving forest governance and forest-based value chains, and additional support to access to justice and adherence to human rights.

Team Europe

The EU and its Member States work together as Team Europe. Jointly, they are one of the most important donors in grants to Vietnam. EU grants to Vietnam are used in line with the country's socio-economic policies and come in support of the government’s efforts to restructuring the economy with the aim of ensuring long term growth and welfare for its citizens.

The two main areas, in which the EU and its Member States are joining hands to support Vietnam are the following two Team Europe Initiatives:

1. Climate-responsive digital circular economy

2. Responsible entrepreneurship and enhanced skills for decent employment

These initiatives are fully reflected in the EU’s multi-annual indicative programme as priority one and 2.

Additionally, the EU and its Member States are making efforts to also take joint approaches in the areas of digital transformation, energy transition, forestry, sustainable transport and support to the Mekong Delta region, among others.

  • Renewable Energy - Vietnam

Just Energy Transition Partnership (JETP)

The JETP Political Declaration (PD) was signed on 14 December 2022 (Brussels EU-ASEAN Summit) by Vietnam and the International Partners Group (IPG)[1], with the EU and the UK as co-leads.

JETP aims to support Vietnam to deliver on its ambitious net zero goal, accelerate the peaking of its greenhouse gas emissions and transition away from fossil fuels to clean energy.

JETP will mobilise an initial 15.5 billion USD of public and private finance over the next three to five years.

If achieved, JETP will bring forward the projected peak date for all greenhouse gas emissions in Vietnam from 2035 to 2030.

  • It also seeks to reduce peak annual power sector emissions by up to 30 percent, from 240 megatons to 170 megatons in 2030, and bringing forward the peaking date of the power sector by five years to 2030.
  • Limiting Vietnam's peak coal capacity to 30.2 gigawatts, down from a previously planned figure of 37.0 gigawatts (2030).
  • Accelerating the adoption of renewables so that c energy accounts for at least 47 percent of electricity generation by 2030, up from the current planned generation share of 36 per cent.

 

[1] The IPG consists of the EU, the UK, the US, Japan, Germany, France, Italy, Canada, Denmark and Norway.

Cooperation with Civil Society

The European Union strongly acknowledges the role of Civil Society in development and the importance of civil society policy engagement, which is manifested in the substantial political and financial support the EU has provided to civil society actors over many years.

The EU Delegation and the EU Member States for the first time developed an EU Roadmap for Engagement with Civil Society (CSO) in Vietnam in 2014 outlining the EU's key priorities in cooperation with CSOs in the country. Regular updates of the Roadmap in 2018 and in 2021 ensured it remains aligned with the evolving nature of EU relations with Vietnam, which cuts across political, trade, and cooperation dimensions.

The EU provides financial support to Civil Society in Vietnam through its bilateral, regional and thematic programmes. A number of Calls for Proposals under the framework of these programmes have been launched in Vietnam, resulting in over one hundred grants awarded. These grants cover diverse areas, such as healthcare, labour, community development, child protection, water and sanitation, access to energy, capacity building for youth, climate change, gender equality, empowerment of ethnic minority, land rights, freedom of expression, as well as support to civil society involvement in the implementation of the Free Trade Agreements (FTA) and specific support towards the achievement of Sustainable Development Goals.  

The EU Roadmap for engagement with CSOs and EU support to civil society goes beyond mere funding of projects. The EU, in close cooperation with its Member States, is engaging with civil society through policy dialogues as well as economic and trade and political cooperation. The EU has an active Partnership and Cooperation Agreement with Vietnam, which covers civil society and many other fields in a comprehensive approach. The EU-Vietnam Free Trade Agreement includes a mechanism for the involvement of civil society in the implementation of the chapter on trade and sustainable development under the agreement. 

Civil Society Organizations that wish to apply for EU funding can regularly check the EU Delegation to Vietnam website for publication of calls and similar opportunities.

Science, Technology and Digitalisation

Under the European Union’s Multiannual Financial Framework for 2021-2027, there are six priority areas defined for the EU’s external assistance: Green Deal; Sustainable Growth and Jobs; Migration; Science & Technology, including innovation and digitalisation; Good Governance; and Human Development.

Promoting European research and innovation values and principles allows the EU to maintain its global leadership in science and to secure its industrial sovereignty. Research and innovation will play a central role in

  • accelerating and navigating the necessary transitions
  • deploying, demonstrating and de-risking solutions
  • engaging citizens in social innovation

Horizon Europe  

Horizon Europe is the European Union’s flagship Research and Innovation programme with a budget of 95.5 billion EUR during 2021-2027. This programme is one of the main tools to implement Europe’s strategy for international cooperation: the Global Approach to research and innovation.

The programme facilitates collaboration and strengthens the impact of research and innovation in developing, supporting and implementing EU policies while tackling global challenges. It supports creating and better dispersing of excellent knowledge and technologies. 

It creates jobs, fully engages the EU’s talent pool, boosts economic growth, promotes industrial competitiveness and optimises investment impact within a strengthened European Research Area. Legal entities from the EU and associated countries can participate. 

The openness of Horizon Europe to international cooperation will be balanced with the need to safeguard EU interests in strategic areas, in particular to promote the EU’s strategic autonomy and its technological leadership and competitiveness where necessary.

New elements in Horizon Europe 

  • European Innovation Council: Support for innovations with potential breakthrough and disruptive nature with scale-up potential that may be too risky for private investors. 70% of the budget are earmarked for SMEs. 
  • Missions: Sets of measures to achieve bold, inspirational and measurable goals within a set timeframe. There are five main missions as part of Horizon Europe. 
  • Open science policy: Mandatory open access to publications and open science principles are applied throughout the programme. 
  • A new approach to partnerships: Objective-driven and more ambitious partnerships with industry in support of EU policy objectives.

More information can be found here. 

Digital Transformation

The EU’s Global Gateway Strategy has a strong focus on advancing digital transformation to boost connectivity. The EU wishes to strengthen connections between Europe and the world, by helping partner countries address the digital divide and further integrating all partners into the global digital ecosystem.

In Vietnam, the EU Delegation works under a Team Europe approach with EU Member States in promoting Digital for Development (D4D).

Climate-responsive digital circular economy is one of the three priority areas of the EU’s Multi-annual Indicative Programme (MIP) for Vietnam 2021-2027. In collaboration with relevant Ministries, private sectors and non-State-actors, the EU Delegation is exploring options to promote digital transformation in different fields of EU-Vietnam cooperation. Areas of focus are:

  • green-digital twin transition, i.e. improved digital skills for circular economy platforms, improved circularity in the value chains of digital/electronic devices, smarter energy transition etc.;
  • enhanced, affordable and secure digital connectivity, i.e. cyber security; broadband Internet connection via either optical fibre cable or satellite; digital infrastructures; etc., and
  • e-governance and e-skills building.

Of equal importance is cybersecurity. The EU wishes to share with Viet Nam its experience with the Digital Services Act (DSA) on content moderation practices of online platforms. The DSA is a gold standard to ensure transparency and accountability of the online space and, with that, it could be helpful for the enforcement of Vietnam’s Cybersecurity Law.

Gender Equality

EU Policies

The new EU Gender Action Plan (GAP) III, covering the period for 2021-2025, calls for a gender-equal world and will scale up the EU contribution to reach SDG 5. The EU GAP III was developed based on the core principle of the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), the international convention that Vietnam ratified in 1982. The focus is on fighting gender-based violence and promoting the economic, social and political empowerment of women and girls. It renews emphasis on universal access to healthcare, sexual and reproductive health and rights, on gender equality in education. It also integrates the EU policy framework on Women, Peace and Security (WPS), and brings the gender perspective to new policy areas, such as the green-digital twin transition.

The EU GAP III has a clear objective that, by 2025, 85% of all new external actions of the EU should contribute to gender equality and women's empowerment. It means that the EU will need to ensure that gender perspective is embedded consistently and genuinely in all sectors of EU-Vietnam cooperation, including for instance: green digital circular economy, decent work and responsible business, governance and rules of law, or even transport, energy or digital infrastructures notably, which are areas central to implementation of the EU's Global Gateway strategy.

EU Actions

The EU has recently adopted a financing decision for the EU-Vietnam Women-led Green Partnership Programme, which aims to establish a strategic cooperation with socio-political organisations of Vietnam, including but not limited to the Vietnam Women’s Union. The programme will assist in the structured dialogues, hosted by Vietnam Women’s Union, between the Government, Team Europe and the non-State-actors (NSAs) on Vietnam’s international commitments to climate change adaptation and mitigation; environmental protection; gender equality and women empowerment.

To complement the technical assistance for structured dialogues, the EU will also provide grant support to women-led initiatives on (a) climate change adaptation and disaster resilience and (b) digital and circular value chains. The EU expects that these initiatives will eventually promote women’s leadership and participation in decision-making, as well as women economic empowerment in Vietnam.