BRUSSELS – Poor worker rights in Vietnam could prove a major obstacle to trade agreements with the EU, with textiles and apparel among sectors under scrutiny. Reports from Brussels suggest EU trade commissioner Cecilia Malmström wants to see Vietnam commit to labour reforms before a trade deal is fully implemented.
European Commission president Jean-Claude Juncker and former Vietnamese Prime Minister Nguyễn Tấn Dũng concluded negotiations on a trade deal for the EU and Vietnam in December 2015. However, the deal has yet to be ratified by the European Parliament or the 28-member countries of the EU, and it could meet significant opposition. Most recently, French President Emmanuel Macron has hinted at a more protectionist stance, suggesting the EU should try protect its workers against unrestricted free trade and unfair competition from Asian sweatshops.
Discussing the Vietnam situation, Bernd Lange from the Socialists and Democrats group and chair of the assembly’s trade committee, recently told reporters that if there is, “no progress on human rights and especially on … labour rights, then the deal cannot be ratified by the European Parliament.” Lange has also claimed it is unfair for multi-nationals to use Vietnam as a cheap manufacturing base, with lower environmental standards before exporting goods tariff-free back into the EU.
Macron has already proposed that if Vietnam breaches its commitments to respect freedom of association, or the rights of trade unions to negotiate wages, then the EU should be able to suspend trading preferences.
Labour rights are a binding part of the proposed trade deal the EU has signed with Vietnam, including ratification of ILO conventions. That said, there is no timeline in place and, as has been seen other garment exporting nations in South East Asia, introducing and enforcing legislation to improve worker rights can be notoriously difficult and take many years.
EU exports to Vietnam are currently dominated by high tech products including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products. Vietnam’s key export items to the EU include electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture.
In 2016, EU-Vietnam trade in goods was worth over €42.4bn, with €33.1bn in imports from Vietnam into the EU and €9.3bn in exports from the EU to Vietnam.