How A Kidnapping In Berlin Could Bring Down Vietnam’s FTA With Europe

 Berlin (Forbes, Aug 11,2017): A proposed free trade agreement between Vietnam and the European Union could be hanging in the balance after the German foreign ministry accused Vietnam’s secret service of kidnapping a Vietnamese businessman from the streets of Berlin late last month. Trinh Xuan Thanh, who is wanted by Vietnamese authorities for alleged financial crimes, was abducted in the heart of the German capital on July 23, the German government says, but Hanoi claims he voluntarily returned to Vietnam and turned himself in to the police. He later appeared on Vietnamese state-television to deliver a “confession,” which his lawyer called “forced.”

War of Words

Earlier this month, Germany’s foreign ministry said there are “no longer any serious doubts” that Vietnam’s secret service and embassy were involved in the abduction, and described it as an “unprecedented and blatant violation of German law and international law.” It also called on Hanoi to return Thanh to Germany, where he was applying for asylum. The German foreign minister later described the event as akin to “thriller films about the Cold War.”

“Berlin should demand that the Vietnamese immediately release Thanh, and base any continued engagement between Germany and Vietnam on a successful resolution of the case,” said Phil Robertson, deputy director of Human Rights Watch’s Asia division.

What’s At Stake

One option is that Germany restricts development aid to Vietnam. In 2015, it pledged $257 million for a two-year period. Another option, analysts told me confidently, could be that German Chancellor Angela Merkel, today the informal leader of the EU, has her government lobby its European neighbors to halt progress on the proposed EU-Vietnam Free Trade Agreement (EVFTA), which both sides agreed to in December 2015 and was expected to be ratified early next year.

The agreement is vitally important for Vietnam. Its bilateral trade with the EU rose from just $10 billion in 2006 to a whopping $48 billion last year. The EU is today Vietnam’s second-largest trading partner, after China, and second-biggest export market, after the United States.  The European Commission, the EU’s executive arm, thinks the EVFTA could boost Vietnam’s GDP by as much as 15%