Vietnam and the European Union have signed an agreement on market access designed to create more favourable conditions for EU investors in exchange for the suspension of quotas on textile and garments exported from Vietnam to the EU since January 1, 2005. Vietnam will also apply import tariffs on garments, cloth and yarns from the EU, including a 5% tariff on yarns.

The agreement was signed by Vietnam’s ambassador to the EC and Belgium Phan Thuy Thanh, Luxembourg’s ambassador to the EC and EC representative Martine Schommer and director of the EC directorate general for trade and EC representative Paul Vandoren.

The deal is designed to tighten cooperation in trade and investment between the two sides. Bilateral trade between Vietnam and the EU hit €6.5 billion ($8.57 billion) in 2004, up 20% from 2003. Vietnam’s export turnover to the EU currently accounts for 22% of the total exports.

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