The EU-Vietnam Free Trade Agreement (EVFTA) seems to deviate from the poor track record of ‘trade and sustainable development’ chapters in EU FTAs. Ahead of ratification, Vietnam embarked upon pathbreaking reforms, culminating in a new labor code and accession to outstanding ILO core conventions. This article assesses the impact of the EVFTA on these reforms. Building on literatures on the trade-labor nexus and externalization of EU governance, we call for a more comprehensive analysis of power dynamics in partner countries and address the lacunae by embedding FTAs and labor reform in a strategic-relational conceptualization of states. We argue that the success of the EVFTA was the outcome of specific conjunctures of socio-political forces in, and outside of, state institutions on both sides, and their mediation across transnational space. Amid free trade skepticism in the EU, particular members of the Parliament and the Council wielded their veto powers to negotiate with Vietnam and pull the Commission into a stronger position. In Vietnam, the external pressure resonated with internal struggles and empowered reformists to drive forward labor reforms within the party-state. While this outcome supports pre-ratification conditionality in labor clauses, it also stresses the importance of social struggles to leverage such clauses.

Free trade agreements, labor reforms, states, social struggles, EU, Vietnam

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No. 12

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Institut für Internationale Entwicklung (IE)