Surge in Vietnam's exports to Europe
Surge in Vietnam's exports to Europe
The EU-Vietnam Free Trade Agreement (EVFTA), which took effect on August 1, 2020, has given an impetus to Vietnam’s exports, according to the Ministry of Industry and Trade.
Double-digit growth
Tran Thanh Hai, Deputy Director of the Ministry of Industry and Trade’s Agency of Foreign Trade said Vietnam has exported goods worth US$83 billion to the EU since the EVFTA took effect, an increase of 15 percent over the past two years.
According to the agency’s representative, the EU has become a leading importer of Vietnamese products, including seafood and rice, and is a large consumer of industrial products. Over the past two years, most Vietnamese exports to the EU have experienced very high growth, with iron and steel exports almost tripling, coffee sales increasing 75.2 percent and pepper soaring 55.8 percent. The country’s traditional exports to this market, including textiles and garment, leather and footwear, and wood furniture, grew 10-15 percent, Hair said. Meanwhile, phone and component exports dropped due to COVID-19, he added.
Economists believe Vietnamese businesses have made good use of market opportunities, as well as the EU's tariff incentives.
Tra fish, a major Vietnamese export, brought in revenue of US$197 million in July and US$1.6 billion in the first seven months of 2022, up 56 and 79 percent from the same time in 2021, respectively |
Ngo Chung Khanh, Deputy Director of the Ministry of Industry and Trade's Multilateral Trade Policy Department said the EU is a discerning market that imposes technical barriers, but Vietnam’s businesses are still willing to challenge them and meet high standards to enter this market.
Le Hang, Communications Director of the Vietnam Association of Seafood Exporters and Producers (VASEP) said the EU was one of the three biggest importers of Vietnamese seafood by the end of the second quarter of 2022.
Thanks to the EVFTA’s tariff preferences, seafood exports to the EU grew 28 percent in July and reached a total value of US$829 million in the first seven months of this year, up 39 percent from the same period last year. Tra fish, a major Vietnamese export, brought in revenue of US$197 million in July and US$1.6 billion in the first seven months of 2022, up 56 and 79 percent from the same time in 2021, respectively.
Rice exporters are also taking advantage of the EVFTA’s opportunities. Pham Thai Binh, General Director of Trung An Hi-tech Farming Joint Stock Company said that in the first half of 2022, his company’s rice exports increased 68 percent in value, and the EU has become a major importer of Vietnamese rice, including high-quality rice.
Computer, electronic and component exports to the EU experienced high growth in 2022 |
Challenges
Tran Thanh Hai said the pandemic provided important lessons, especially in terms of supply chain disruptions that is forcing enterprises to diversify supply sources, take the initiative in development of raw material sources and eco-friendly and sustainable materials supply chains. Businesses need to build a foothold in the market through branding development, he added.
Le Hang, Communications Director of VASEP said the biggest challenges enterprises face in exporting to the EU are adhering to the rules of origin, avoiding yellow cards on illegal, unreported and unregulated (IUU) fishing, inflation that is shrinking EU consumer demand, and increasingly sophisticated market, environmental and labor certifications and requirements.
