The European Council has approved a free trade agreement (FTA) between the European Union and Vietnam.
The FTA is expected to come into force during the summer of 2020, after it is passed by the Vietnamese National Assembly.
Once approved, existing tariffs on olive oil in all of its fractions will be eliminated. E.U. olive oil exports to Vietnam currently face an average tariff of 8.7 percent, according to data from the International Trade Center.
In a 2019 report on the Vietnamese olive oil market, the Spanish Institute for Foreign Trade (ICEX) listed these tariffs as one of the major barriers preventing more Spanish olive oil producers from accessing the lucrative market.
The removal of the tariffs now paves the way for olive oil exporters to access Vietnam’s rapidly rising middle class. The Southeast Asian country is home to more than 95 million people and is viewed as fertile ground for European olive oil exporters due to steadily rising wages and consumer spending.
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“Olive oil is well known and appreciated in Vietnam where it is mainly used for its healthy qualities,” ICEX wrote the report. “Almost all media devoted to health, beauty or lifestyle recommend the use of olive oil.”
Spain, Italy and Greece already combine to dominate the Vietnamese olive oil market, making up nearly 97 percent of its olive oil imports in 2018, the last year for which data is available.
Also included in the deal is the recognition of seven different geographical indicators from both Spain and Greece, including Antequera, Baena, Priego de Córdoba, Sierra de Segura, Sierra Mágina, Kalamata and Sitia Lasithiou Kritis.