UPDATE-1-Vietnam, EU sign landmark free trade deal

* EU-Vietnam FTA will remove tariffs on 99% of goods
* Deal still needs European Parliament approval
* FTA is EU's first of its kind with developing country in
Asia
* EU is Vietnam's second-largest export market after U.S.

By Khanh Vu and Phuong Nguyen
Hanoi, June 30 (Reuters) - The European Union signed a
landmark free trade deal with Vietnam on Sunday, the first of
its kind with a developing country in Asia, paving the way for
tariff reductions on 99% of goods between the trading bloc and
Southeast Asian country.
It still needs the approval of the European Parliament,
which is not a given as some lawmakers are concerned about
Vietnam's human rights record.
The European Union has described the EU-Vietnam Free Trade
Agreement (EVFTA) as "the most ambitious free trade deal ever
concluded with a developing country".
The two sides announced the deal in a statement.
It was signed in Hanoi between European Union Trade
Commissioner Cecilia Malmstrom and Vietnam's Minister of
Industry and Trade Tran Tuan Anh, three-and-a-half years after
negotiations ended in December 2015.
It will eliminate 99% of tariffs, although some will be cut
over a 10-year period and other goods, notably agricultural
products, will be limited by quotas.
Vietnam, which has one of the region's fastest-growing
economies, backed by robust exports and foreign investment, has
already signed about a dozen free trade pacts, including an
11-country deal that will slash tariffs across much of the
Asia-Pacific, known as the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP).
The agreement with the EU is also expected to open up public
procurement and services markets, such as for the postal,
banking and maritime sectors.
The EU is Vietnam's second-largest export market after the
United States, with main exports including garment and footwear
products.
In 2018, Vietnam exported $42.5 billion worth of goods and
services to the EU, while the value of imports from the region
reached $13.8 billion, official data shows.
The Vietnamese government said on Sunday that EVFTA would
boost EU exports to Vietnam by 15.28% and those from Vietnam to
the EU by 20.0% by 2020.
The agreement will boost Vietnam's gross domestic product by
2.18%-3.25% annually by 2023 and by 4.57%-5.30% annually between
2024-2028, the government said.
On Friday, the EU and South American bloc Mercosur agreed a
free-trade treaty following two decades of talks. In Asia, the EU has trade agreements with South Korea, Japan
and Singapore, and it has launched negotiations with Indonesia,
Malaysia, the Philippines and Thailand.
The EU-Singapore deal is set to come into force later this
year.