THE European Union and Vietnam reached an agreement in principle for a free trade agreement after two and a half years of negotiations, reports Reuters.
The European Commission said the deal will remove nearly all tariffs on goods traded between the two economies.
"We have a deal. This finely balanced agreement will boost trade with one of Asia？|s most dynamic economies," EU Trade Commissioner Cecilia Malmstrom said in a statement.
"It sets a new, better and modern model for Free Trade Agreements between the EU and developing countries, and establishes a good standard for the trade relationship between the EU and south East Asia as a whole," she said.
On the basis of the agreement, the negotiating teams are now to settle some remaining technical issues and finalise the legal text. The agreement is then to be approved by EU trade ministers and the European Parliament.