Ministers from European Union countries on Tuesday approved a landmark free trade agreement with Vietnam, which will reduce tariffs on 99% of goods over a period of 10 years, reports Trend citing to Reuters.

The bloc hopes the accord, the first of its kind with a developing country in Asia and second with a member of regional association ASEAN, will be a stepping stone toward a wider EU-Southeast Asia trade deal. It also covers investments.

An EU-Singapore deal is set to enter force later this year.

The two parties will sign the agreement in Hanoi on Sunday, three-and-a-half years after negotiations ended. It will still need the approval of the European Parliament, which is not a given as some lawmakers are concerned about Vietnam's human rights record.

Vietnam, which currently benefits from preferential access to EU markets under the bloc's scheme for developing countries, will secure quotas for farm products, such as rice, garlic and sugar.

For EU exports, the agreement will eventually eliminate very high Vietnamese import duties, such as up to 78% for cars and 50% for wine.

The agreement will also open up public procurement and services markets, such as for post, banking and the maritime sector.

The Commission has estimated that the agreement will boost EU exports to Vietnam by 29% and those from Vietnam to Europe by 18%.

The EU already has trade agreements with South Korea, Japan and Singapore, and it has launched negotiations with other ASEAN members Indonesia, Malaysia, the Philippines and Thailand.

Source: TREND News Agency