On 23 July 2020, IKV Chairman Ayhan Zeytinoğlu issued the following statement on the EU-Vietnam Free Trade Agreement (FTA) which is set to take effect on 1 August 2020:

“As of 1 August, another FTA will be added to EU's new generation FTAs. This time, the country in question is Vietnam, which with its export surge, stands out as an alternative market to China. Vietnam is the second Southeast Asian country after Singapore to sign an FTA with the EU. The EU presents the agreement as the most ambitious FTA it has concluded with a developing country. As soon as the agreement enters into force, 71% of customs duties will be lifted in Vietnam's exports to the EU, and the rest will be phased out in seven years. Moreover, the EU-Vietnam FTA prohibits non-tariff barriers and sets out conditions for the protection of intellectual property rights, workers’ rights and sustainable development. The agreement also covers the services and public procurement sectors. Along with the FTA, the parties signed an agreement on the protection of bilateral investments.

Concerning Turkey-EU Customs Union, a major area of concern is the asymmetry resulting from EU’s FTAs. When the EU concludes an FTA with a third country, a similar agreement needs to be signed between Turkey and the third country which occurs with delays. Meanwhile, the third country obtains the right to export to Turkey duty-free due to Turkey-EU Customs Union whereas the third country can continue imposing tariff barriers to Turkey. Even in the scenario Turkey signs an FTA with the third country, the time needed to conclude an agreement works to Turkey’s disadvantage as trade relations continue in an asymmetrical way. This asymmetry was to be tackled in the context of the Customs Union modernisation process, but the negotiations are yet to be launched due to political reasons. Turkey has made an attempt to sign an FTA with Vietnam, but negotiations have not started and this leaves Turkey in a disadvantaged position. However the main problem about the agreement is that as of 1 August exports from Vietnam to the EU and EU’s investments in Vietnam are likely to increase. According to projections, Vietnam will increase its exports to the EU by almost 42.7% by 2025 especially in textiles, shoes, and electronics sectors. Therefore, Vietnam will become an important competitor for Turkey both in terms of exports and as an investment destination. In addition, the urgency of extending the scope of Turkey-EU Customs Union is increasing every day, since its current scope is limited to industrial goods. The EU-Vietnam FTA on the other hand, is a deep and comprehensive FTA which also covers sectors such as services, agriculture, and public procurement, and sets investor-state dispute resolution mechanisms. The Turkey-EU Customs Union needs to be modernised as soon as possible, otherwise Turkey risks not only losing ground in the EU market but also losing its position as an attractive destination for European investments.”