Once such trade agreements are in place, Vietnam will benefit from the benefits of reduced tariffs both within the ASEAN Economic Community (AEC) and with the EU and the United States to attract exporting companies to products in Vietnam and export them to non-ASEAN partners. In February 2020, the European Parliament ratified a free trade agreement (FTA) and an Investment Protection Agreement (PPI) with Vietnam. MEPs (ENPs) voted in favour of the agreements in Strasbourg. Such agreements illustrate the strength of EU-Vietnam relations and the opportunities Europe sees in the Southeast Asian country. The EU is achieving a long-term goal of increasing its influence and expansion in ASEAN markets by targeting Vietnam, and European entrepreneurs will have better access to one of the fastest growing Asian economies when the agreements come into force. Despite the interruption of the coronavirus pandemic and the slowdown in the global economy, Vietnam is expected to continue to record economic growth of 4.8% this year, returning to 6.8% in 2021. The benefits of free trade agreements will enable Vietnam`s economic development to continue to move from the export of low-tech manufacturing products and primary products to more complex high-tech products such as electronics, machinery, vehicles and medical devices. Singapore`s history could be an example from which Vietnam can learn. In 2018, however, Harvard University economist Dani Rodrik said in the Journal of Economic Perspective that if these free trade agreements increase the volume of trade, the distribution of these benefits is another matter: “A trade agreement that is covered by another set of special interests can make things worse as easily as it makes them better.” He also wrote that “such an agreement can distract us from the effective outcome, even if it uses the cover of a free trade agreement and increases the volume of trade and investment. Rodrik stressed that the effects of free trade agreements are fundamentally uncertain and that protectionism is depending on them. Overall, ASEAN is the EU`s third largest trading partner outside Europe, after the United States and China. Ensuring better access for EU exporters to the dynamic ASEAN market is an EU priority.
Negotiations for a trade and investment agreement between the region and ASEAN began in 2007 and were interrupted by mutual agreement in 2009 to relax a bilateral negotiating format. These bilateral trade and investment agreements were designed as building blocks for a future agreement between the regions.