The European Commission approved a trade agreement with Vietnam that will eliminate nearly all tariffs on items traded between the EU and Vietnam.

According to a European Commission release, the agreement also stipulates a legally binding commitment to sustainable development. The deal follows a trade deal with Singapore set to be signed this week.

EU Trade Commissioner Cecilia Malmstrom said the EU's trade deal with Vietnam is an important step toward a potential EU-ASEAN trade pact, the Financial Times reported.

The deal with Vietnam will be submitted to the European Council and then will move on to the European Parliament for consent.