EU peddles rickshaw politics with UK but trumpets trade deal with Vietnam

Who would you rather do a trade deal with? Vietnam? Or a market nearly 30 times larger?

Brexit Facts4EU.Org exposes the truth behind the EU’s latest trade deal

On Saturday 01 Aug 2020 the EU trumpeted the fact that its new trade agreement with Vietnam has finally come into force. How significant is this news?

Brexit Facts4EU.Org Summary

EU-Vietnam trade deal

Vietnam accounts for only €11.1bn of EU27 goods exports
That’s just 0.08% of the EU27’s total GDP - not even a tenth of one percent
The UK accounts for €318.7bn of EU27 exports - nearly 30 times more than Vietnam
Vietnam is the 31st country on the list of EU27 export partners
According to the IMF the UK is the fifth-largest economy in the world – Vietnam is the 44th

EU Commission claims 99% of tariffs with Vietnam will be eliminated – Is this true?

The EU Commission says “the EU-Vietnam trade agreement will ultimately scrap duties on 99% of all goods”.

The key word here is “ultimately”.

In reality it will take until 2030 – ten years from now – for 99% of tariffs to be eliminated. Here is ‘the small print’:-

Five years for all machinery and appliances to be fully tariff-free. Current duties are up to 35%.
Motorbikes will take seven years to be fully tariff-free. Current duty is 75%.
Cars will take up to 10 years. Current duty is 78%.
Car parts will be duty free after seven years. Current duties are up to 32%.
Half of all EU pharmaceuticals exports will not be duty free for seven years. Current duties are up to 8%.
30% of EU chemicals exports will not be duty free until 3-7 years. Current tariffs are up to 25%.
Meats will not be fully tariff-free for between 3-10 years. Currently tariffs range from 15%-40%.
Dairy products will not be fully tariff-free until five years’ time. Current duties are up to 15%.

For a great many businesses across the EU27 countries, the fact that this EU-Vietnam trade deal has “entered into force” will make no difference to them in their current business planning, because nothing will have changed.

Balance of trade

The EU runs a goods trade deficit with Vietnam. This has been going on for years and it has steadily grown. By last year (2019) this had reached €23.3bn euros, up from €3.2bn. That’s an increase of over 700% in just ten years. By contrast, the EU27 continued to enjoy a surplus with the UK. Last year this amounted to almost €125bn.

Deutschland über alles

Germany accounts for almost 40% of all EU27 exports to Vietnam - €4.3bn. It has by far the most to gain from this trade deal, but even then it will barely register on the German economy as a whole.

The second-biggest exporter to Vietnam is France, which accounts for 15% of total EU27 exports to that country.

With Germany and France accounting for over 50% of EU exports to Vietnam, most EU27 countries’ exports are so low that they would classify as an accounting error.

Photo copyright EU Council

Observations

In the last five years we have watched as the EU Commission has desperately tried to play catch-up for the past 30 years when it failed to negotiate meaningful trade deals with the major economies of the world. The UK's Referendum in 2016 shone a spotlight on the Commission's repeated failures and apparent lack of interest in trade, and suddenly there was a flurry of activity.

The EU Commission had hoped to save the day with a deal with the World's No.1 economy - its much touted 'TTIP deal' with the USA.

Sadly for the EU Commission not even the presence in the White House of the arch-europhile US President Barack Obama could help them, and it died a death.

Since then the EU Commission has pursued smaller countries, whilst eventually coming to agreements with Canada and Japan - neither of which deals have yet been ratified.

This brings us to the EU's latest masterpiece...

The EU27’s goods exports to Vietnam last year (2019) were just £9.9bn GBP. This amounts to little more than small change in economic terms if the EU is viewed as a superstate, as it wishes to be. For context, consider how the EU27 sold £285bn pounds of goods to the UK last year.

The UK is an existing market which is nearly 30 times larger than Vietnam’s, and it’s on the EU’s doorstep. Vietnam is almost 10,000 km away. Its systems, labour and other laws, product standards, and judiciary are completely different.

The UK already has all the same standards for its products as the EU. It is also a market where the EU enjoys a massive trade surplus, as opposed to Vietnam with which the EU suffers a major deficit each year. On top of this the UK provides financial services to the EU which the EU can’t do without, and is offering to continue to provide these.

If you were the EU, which country would get your attention if you were looking to do a trade deal – Vietnam or the United Kingdom?

The ideological über-zealots of the EU Commission

The ideological über-zealots of the EU Commission would of course choose Vietnam. In our view it’s time the major countries of the EU woke up to the fact that the Commission is pursuing a vendetta against the British people for daring to leave their precious political construct. It’s also time that some of the UK’s major news organisations started reporting on this problem in a balanced way, rather than constantly taking the EU’s side.

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[ Sources: EU Commission | Eurostat - official EU statistics agency ] Politicians and journalists can contact us for details, as ever.

Brexit Facts4EU.Org, Thur 06 Aug 2020

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Reader Comments 11

1. Iain D , Thursday, August 06, 2020, 06:44:

The difference is that Vietnam does not need to be punished, and need to be seen to be punished.

2. Sydney Ashurst , Thursday, August 06, 2020, 07:03:

Looking at the tortured progress of CETA, there is not a 'cat in hell's chance' of achieving a balanced overall trade deal with the EU this year.
Continuing talks are just hiding the inevitable. Prepare for WTO and achievable sector agreements. Next year Member States will break ranks, those trade surpluses are at risk.
Just look at how keen Spain and Greece are to get Brits back on their beeches.

3. Peter S , Thursday, August 06, 2020, 07:41:

Euronews says the EU is 'concerned about our economic clout' - that's nice. Good to see the move by the car industry to UK in fear of more bureaucratic red tape from from the EU

4. David Raddings , Thursday, August 06, 2020, 08:17:

The fact that Trade Deals between the EU Canada & Japan have still not been ratified by the EU's 27 Nations show what a shambles the EU is

5. Bob Parks , Thursday, August 06, 2020, 10:20:

Is Vietnam going to abide by the ECJ rulings? Do they have a level playing field? Can EU fishermen plunder their fish stocks?
Answers on a postcard to Michel Barnier c/o Cuckoo Land

6. Mike S , Thursday, August 06, 2020, 10:26:

It just goes to show that the only part of the UK the EU has any interest in is London's financial district & are only interested in punishing the rest of the British people for having a backbone in telling the EU what they don't like to hear,:-the TRUTH! This deal with Vietnam is only beneficial to France & Germany,no-one else in the EU! What a shocker that is,eh!! I live in North Scotland & as far as the SNP are concerned,take a good look at all the information to hand on this site & get a grip Sturgeon! British people complain about Boris,we have Sturgeon who can't see or smell what she/they are shoveling! The EU doesn't give a damn about Britain & never have & never will! Never mind, January 1st 2021! Bring it on!!

7. Ian Small , Thursday, August 06, 2020, 12:42:

The Eu are all focussed on the politics of punishment not economic common sense.

8. Basil Vaz , Thursday, August 06, 2020, 20:48:

Question - If we left on WTO terms ie. No Deal, does the WA and the PD become null and void? These two documents could be torn up and put on a bonfire or what?
Or do we still have to abide by the WA and PD even if we left without a deal?

9. Tom Logue , Friday, August 07, 2020, 09:19:

Re 8.
Basil Vaz - have a look at the facts4eu article of Friday, July 17, 2020
“EU breached Withdrawal Agreement, UK must revise or revoke,” say lawyers
How to tear up the Withdrawal Agreement and Political Declaration – the legal case"
which will help you with your questions.
(It's currently on page two).

10. Diane , Friday, August 07, 2020, 10:31:

(8) Basil V (9) Tom L: Yes Tom, I was going to suggest the same. There is little in this world that is impossible to achieve but I think it would be too hopeful to believe ( or in fact believe that our Government has the will to try ) that we can escape this already ratified monstrosity in large part. Sorry to sound like a stuck record but the WA was always an abomination & the extreme damage was already done by the previous government with minimal changes made by the existing one. Although not quite up to date but if interested in the legal side of things, Lawyers For Britain website also has good opinion pieces ( 03 Jul 2019 - Avoiding the trap-How to move on from T May's WA & 18 Oct 2019 - This flawed deal....... price for our freedom )

11 comments, page 1 of 2

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