HANOI: The European Union and Vietnam on Sunday signed a long-awaited free trade deal that will slash duties on almost all goods, an agreement that pushes back against a rising tide of global protectionism and hailed as a “milestone” by Brussels.

The signing comes amid worldwide trade turmoil, with a dragging US-China row and Britain’s impending exit from the European Union casting a dark cloud over global growth.

It follows years of tough negotiations marred by Vietnam’s tarnished human rights record.

EU trade commissioner Cecilia Malmstrom called the deal “an important milestone” and a key step towards better co-operation with Southeast Asian economies.

“This is the most ambitious trade agreement that EU has signed with a developing country,” she told reporters after the landmark deal was inked in Hanoi on Sunday in front of dozens of negotiators and diplomats.

The EU-Vietnam free trade pact will eventually see duties slashed on 99 percent of Europe’s imports from Vietnam.

Billed as a so-called next generation deal, it also includes rules around labour rights and environmental and intellectual property protections.

“We want to make sure that EU trade in this region has a positive impact so we have enshrined high standards,” Malmstrom said.

“It sends a very powerful signal that says ‘we believe in trade’,” she later told AFP.

The deal will come into force only once it is ratified, which could come by the end of the year if approved by lawmakers on both sides.

It is the second EU free trade agreement with a Southeast Asian nation after Singapore signed a deal with the bloc last year.

It comes on the heels of a watershed agreement on Friday between the EU and South American trade bloc Mercosur that will link 800 million people in what will be one the world’s largest regional commercial accords.

EU-Vietnam free trade negotiations kicked off seven years ago, and the EU has come under fire for not putting enough pressure on Vietnam to improve its dismal rights record.

The one-party communist state routinely jails activists and last year passed a restrictive cybersecurity bill that critics say is aimed at silencing dissent online.

Malmstrom said rights issues were raised throughout negotiations and the trade agreement would allow the EU to “engage rather than to isolate” Vietnam on human rights.—AFP