The European Union and Vietnam have reached an agreement in principle for a new free trade agreement after two and a half years of negotiations.
The agreement is the first of its kind the EU has concluded with a developing country.
EU Trade Commissioner Cecilia Malmstrom is hailing the agreement as a "milestone" and the first step toward a region-wide agreement with Southeast Asia.
"This agreement sets an EU new model for trade policy in developing countries. Once the agreement is up and running, it will provide significant opportunities for business, investment and for jobs here in Europe and in Vietnam. It will remove nearly all tariffs on goods traded between us. It covers services, investment and issues such as government procurement."
Two-way trade between the EU and Vietnam has grown three-fold to more than 30 billion US dollars in the last 10 years.
The new deal is expected to take effect in late 2017 or early 2018.
The EU is also holding separate talks with two other ASEAN members, Malaysia and Thailand, to try to secure similar free trade agreements.
Negotiations with China on an investment deal are underway.
However, the EU says free trade talks are "not on the agenda at the moment".
