The EU and Vietnam Sunday signed a long-awaited free trade agreement (FTA) that will slash duties on almost all goods, as fears grow over mounting global protectionism.

The signing comes amid worldwide trade turmoil, with a dragging U.S.-China row and Britain's impending exit from the EU, casting a dark shadow over global growth. The deal was hailed by EU Trade Commissioner Cecilia Malmstrom as "an important milestone" between the trading partners. "We want to make sure that EU trade in this region has a positive impact so we have enshrined high standards in the deal," she said at the signing ceremony yesterday. The deal will come into force only once it is ratified, which could come by the end of the year.

It comes on the heels of a landmark agreement Friday between the EU and South American trade bloc, Mercosur that will link 800 million people in what will be one the world's largest regional commercial accords.

Vietnam's export-led economy has largely been buoyed by free trade, and open access to the European market is expected to boost its main deliveries to the bloc, namely textiles, shoes, smartphones and computer parts. European countries are also eager to tap into Vietnam's market of 95 million people and its fast-mushrooming consumer class.

Vietnam has seen some short-term gains from the trade spat as some companies shift from China into friendlier markets. But analysts warn that a weaker China or the U.S. could ultimately dent economies like Vietnam that largely rely on exports to the world's two biggest economies.

With exports from Vietnam to the U.S. soaring amid the trade spat, U.S. President Donald Trump last week threatened to slap tariffs on the manufacturing hub, calling it "the single worst abuser of everybody."

The EU-Vietnam free trade pact will eventually see duties slashed on 99 percent of Europe's imports from Vietnam. Billed as a so-called high-quality deal, it also includes rules around labor rights and environmental and intellectual property protections. But the EU has come under fire for not putting enough pressure on Vietnam to improve its dismal rights record. The one-party communist state has jailed dozens of activists in recent years and passed a cybersecurity bill last year that critics say is aimed at silencing dissent.

Around 65 percent of duties on EU exports to Vietnam will disappear as soon as the FTA enters into force, while the remainder will be phased out gradually over a period of up to 10 years. As regards Vietnamese exports to the EU, 71 percent of duties will disappear upon entry into force, the remainder being phased out over a period of up to 7 years, the European Council said in a previous statement. Vietnam is the EU's second largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth almost 50 billion euros ($56.94 million) a year and almost 4 billion euros when it comes to services.

While EU investment stocks in Vietnam remain modest, standing at 8.3 billion euros in 2016, an increasing number of European companies are establishing there to set up a hub to serve the Mekong region.

Main EU imports from Vietnam include telecommunications equipment, clothing and food products. The EU mainly exports to Vietnam goods such as machinery and transport equipment, chemicals and agricultural products.