First year of EU-Vietnam trade deal fulfills promise

First year of EU-Vietnam trade deal fulfills promise

Marking its first year of implementation, the EU-Vietnam Free Trade Agreement (EVFTA) has fulfilled its promise with numerous exports recording positive growth.

Taking advantage of opportunities

The EVFTA, which took effect on August 1, 2020, has provided great opportunities for Vietnam’s exports and offers particular hope for helping the Vietnamese economy recover from the pandemic.

Agricultural products are among Vietnam’s major exports to the EU

Five months after the EVFTA took effect, the turnover of many agro-forestry products exported to the EU increased significantly. Specifically, rubber and rice exports to the EU reached US$61 million and US$5.2 million in the last five months of 2020, an increase of 56.91 percent and 3.73 percent compared to a year ago, respectively. The export value of rattan, bamboo, sedge and carpet products, and fruit and vegetables stood at US$70.5 million and US$63.8 million, a year-on-year increase of 33.75 percent and 12.5 percent, respectively.

In the first half of 2021, trade turnover between Vietnam and the EU reached US$27.67 billion, an increase of 18.4 percent compared to a year ago, with Vietnam’s exports increasing by 18.3 percent to US$19.4 billion and imports surging by 19.1 percent to US$8.2 billion.

Luong Hoang Thai, director of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, said that thanks to careful preparations, Vietnam has made better use of the EVFTA compared to other trade deals it has signed so far.

Many sectors have enjoyed incentives under the EVFTA. Specifically, the garment and textile sector exported US$2.263 billion worth of goods to the EU in the first half of 2021, up 4.85 percent compared to the same period last year. Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association, said that without the EVFTA, the export figure would have reached only about US$700-800 million.

During the reviewed period, seafood exports to the EU reached US$486 million, an increase of 20 percent compared to a year ago. In addition, the leather and footwear sector has made most of the opportunities offered by the trade deal to increase its export turnover.

The EU’s main exports to Vietnam increased by 18 percent in the first half of 2021, including chemicals, pharmaceuticals, cars, and automobile parts. These products are of good quality and high technology content, meeting the needs of Vietnamese consumers.

Vietnam’s exports to the EU have increased rapidly since the EVFTA took effect

First meeting of EVFTA Trade Committee

Vietnamese Minister of Industry and Trade Nguyen Hong Dien and EU Trade Commissioner Valdis Dombrovskis co-chaired the first meeting of the EVFTA’s Trade Committee in late July.

At the meeting, both sides agreed on mechanisms to cope with matters that may arise in the implementation of the trade deal, especially in issues related to trade and investment, such as facilitating the smooth flow of goods between the two sides and granting electronic permits on inspection of product quality.

In the first year of EVFTA implementation, Vietnam focused on sectors where the country has advantages, such as seafood, leather and footwear, garment and textile, and agricultural products. Vietnam should drive towards new sectors that have potential for future development, Luong Hoang Thai said, adding that the two sides discussed renewable energy and automobiles using clean energy.

VietNam Economic News