Viet Nam Human Rights
Bright prospects for EU-Vietnam trade
12/7/22
The European Union (EU) has always been the most important partner of Vietnam as the latter has always been an attractive investment destination for European firms, according to Pham Tan Cong, Chairman of the Vietnam Chamber of Commerce and Industry, at the Vietnam-EU Agribusiness Forum on July 11.
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| Farmers harvest coffee beans. Coffee is among Vietnamese products that have gained ground in the EU. |
Cong said the EU-Vietnam Free Trade Agreement (EVFTA) has improved bilateral trade and kept Vietnam afloat at a growth rate of 2.58 percent during the pandemic. In 2021, Vietnamese exports to the EU hit USD 40.6 billion and imports hit USD 16.89 billion, up over 14 percent year-on-year.
The EU remains Vietnam’s third-largest agricultural importer with an annual turnover of USD 5.5 billion. However, the figures account for just 4 percent of the EU’s total agricultural imports, indicating that room for trade growth is still ample for Vietnamese producers.
He recommended EU investors consider pouring money into four northern provinces -Hung Yen, Quang Ninh, Hai Phong and Hai Duong - since they are the most economically dynamic provinces in Vietnam.
These provinces boast energic local governments, favorable conditions for investment, the best highways, international airports, deep-water ports, industrial parks and a population of seven million, well-suited for high-quality agricultural production that would bring more Vietnamese tropical produce to the EU market.
Phung Duc Tien, Deputy Minister of Agriculture and Rural Development, remarked that EU and Vietnamese agricultural exports never compete but support each other.
Vietnam exports coffee, nuts, pepper, seafood and wood products to the EU whereas trade includes agricultural equipment, machines and animal feed in the other direction.
Agro-forestry-fishery trade between the two partners rose from USD 4.3 billion in 2015 to USD 5.2 billion in 2021, and reached USD 2.7 billion in the first five months of 2022.
The deputy minister underscored the EU as a key partner and a large importer of Vietnamese farm produce. Bilateral commercial figures have been increasing steadily since the EVFTA came into effect.
He said his ministry is ready to closely cooperate with the EU in trade facilitation, to ensure technical requirements be applied in line with global norms and no trade barriers be established without adequate evidence.
He also said Vietnam aims to leverage more EU foreign direct investments to develop agricultural knowledge and establish a circular and organic agriculture to help Vietnamese producers gain ground in global markets.
"We hope that Vietnamese and European firms join forces to build strong agricultural value chains that help bring the two markets closer," he added.
Janusz Wojciechowski, EU High Commissioner for Agriculture, asserted that Vietnam has become an important partner of the EU in Southeast Asia since the EVFTA took effect in 2020.
Thanks to the agreement, EU customers have had a chance to get a taste of Vietnamese tea and coffee and get their hands on various other products including nuts, spices and fruit.
Some of these products were granted protected geographical indication such as Luc Ngan seedless lychees and Bao Lam seedless persimmons. Others products benefited greatly from the preferential tariffs under EVFTA, entering the EU market duty-free.
However, the commissioner remarked that bilateral trade has been skewed in favor of Vietnam by around 1 billion euros. He opined that both sides should create a more balanced trade pattern in the short term to maintain sound commercial relations.
He also expressed his wish to discuss with Vietnamese authorities on the abolishment of some existing trade barriers related to phytosanitary standards to further boost bilateral trade. Vietnam’s mounting excise tax on alcoholic beverages is also a matter of concern for EU exporters.
He revealed that the EU will support Vietnamese cacao through a project of around 1.6 million euros in the coming years. The project is part of a series of EU projects designed to help Vietnam develop sustainable agriculture and deal with environmental problems.
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All comments [ 19 ]
Trade between Vietnam and the EU rose 14.8 percent in 2021 to 63.6 billion USD despite impacts of COVID-19.
The results to the EU - Vietnam Free Trade Agreement (EVFTA), which took effect more than one year ago.
The EVFTA is a bilateral commitment with incentives and long-lasting value.
The EU-Vietnam Free Trade Agreement (EVFTA) entered into force on August 1st, 2020. An opportunity to examine the initial impacts and to analyze the prospects for the future.
As the most ambitious FTA (free trade agreement) the EU has ever signed with a developing country, the EU-Vietnam Free Trade Agreement (EVFTA) will mutually lift 99% of the tariffs within ten years
The time has come to examine its effects and see if there are already some observable results on the EU-Vietnam trade
A more significant trade change is more likely to be observable at a later stage of the EVFTA implementation process.
The agreement came into force as the Covid-19 pandemic was causing disruption to global trade.
EU-Vietnam trade has outperformed overall EU trade with other countries outside of Europe.
There is certainly a brighter outlook, particularly in light of the expected economic recovery in 2021.
The EVFTA should enable EU companies to be better prepared for two major structural changes in the global supply chain.
These are diversification and regionalization, which in the context of the pandemic could accelerate.
Regarding the regionalization of supply chains, the EVFTA and the other free trade agreements that the EU has signed with the major Asian economies.
The great potential in EU-Vietnam trade also means growing investment opportunities in the Vietnamese logistics sector
The positive outlook for EU-Vietnam trade is likely to generate new demand in multimodal shipping (rail-ocean freight).
Vietnam’s FTAs and other bilateral agreements are likely to aid and play a significant role in the medium to long term.
Vietnam is currently negotiating the Vietnam-EFTA agreement, which involves Vietnam and the EFTA (Switzerland, Norway, Iceland, and Liechtenstein), and Vietnam-Israel FTA.
Businesses can further look at which industries can benefit from FTAs, and tailor their production according to current demand and trends.
This year will be important for Vietnam as it looks to bounce back to pre-pandemic growth levels after strict lockdowns and production stoppages.
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