The EU on Tuesday announced a free trade deal "in principle" with Vietnam aimed at removing nearly all tariffs on goods traded between the two countries.
"We have a deal," EU Trade commissioner Cecilia Malmstroem announced as her office said it was "an agreement in principle" in two and a half years of "intense" negotiations for a free trade agreement.
"This finely balanced agreement will boost trade with one of Asia’s most dynamic economies," Malmstroem said.
"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 Southeast Asia as a whole," she added.
The announcement followed a telephone conversation between Malmstroem and Vietnamese Industry and Trade Minister Vu Huy Hoang.
The two sides had agreed on "all issues of substance" and that the "agreement will remove nearly all tariffs on goods traded between the two economies," Malmstroem's office said.
Malmstroem said the deal would boost opportunities for both EU and Vietnamese companies "by increasing market access for goods and services." She added that more than 31 million jobs in Europe -- which is suffering from high unemployment -- depend on exports.
"So having easier access to a growing and fast developing market like Vietnam, with its 90 million consumers, is great news," the commissioner said.
Malmstroem said the negotiating teams will now work on the finer points, "settle some remaining technical issues and finalise the legal text." The final version will then have to be approved by the EU member states and the European Parliament.