Vietnam H1 exports to EU may decline 8% if Covid-19 pandemic lasts till June
Vietnam H1 exports to EU may decline 8% if Covid-19 pandemic lasts till June
The bloc’s travel restriction, however, would not impact trade relations between Vietnam and the EU in the immediate future.
Vietnam’s exports to the EU in the first and second quarters of 2020 could decline 6 – 8% in case the Covid-19 pandemic lasts until June, according to the Ministry of Industry and Trade (MoIT).
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During these periods, the country’s major export staples, including computers, phones and parts could face a plunge in export volume due to input shortages and low demand.
This came as a result of the EU’s decision to close external borders for 30 days in a bid to slow the Covid-19 pandemic, a representative of the MoIT was quoted by the Government Portal, insisting this is not a lockdown.
The bloc’s travel restriction, however, would not impact trade relations between Vietnam and the EU in the immediate future as it only applies to individuals, not the movement of goods.
However, such anti-virus measures would no doubt slow the export procedures, from transportation, customs clearance, to distribution, in turn disrupting economic activities.
Additionally, demand for non-essential goods from the EU market, including phones, garment, footwear, wooden products, which are Vietnam’s major export products to the bloc, could all decline, except for agricultural products.
The Covid-19 pandemic could also affect the volume of goods exported to the EU via air transportation as airlines are canceling flights to the region.
The MoIT expected tightening measures to prevent the spread of the pandemic could delay the signing of new export orders in the future between Vietnamese enterprises and their EU partners, and restrict the movement of experts and workers.
Under this circumstance, the MoIT forecast a gloomy trade outlook between Vietnam and the EU in 2020, which may be partially offset by the enforcement of the EU – Vietam Free Trade Agreement (EVFTA) by the end of 2020.
The EU is one of Vietnam’s largest trade partners with turnover of US$56.45 billion in 2019, up 1.11% year-on-year, in which the latter exported goods worth US$41.54 billion and imported goods worth US$14.9 billion.
