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EU-Vietnam Free Trade Agreement Offers Opportunities To Promote Bilateral Exports

16/11/02021 | BY ducanh

After more than a year implementing the EU-Vietnam Free Trade Agreement (EVFTA), the competitiveness and market share of Vietnamese goods in the European Union (EU) market have both improved remarkably. Vietnam has also risen to become the EU's largest goods trading partner in the ASEAN region.

Improving competitiveness and market share

According to the General Department of Vietnam Customs, two-way trade between Vietnam and the EU this year reached US$54.87 billion, up 12.1% over the same period last year.

Although Vietnam was severely affected by the fourth COVID-19 outbreak, particularly in the southern key export region, two-way trade between Vietnam and the EU still recorded positive growth in the first nine months of 2021with turnover of US$41.3 billion, up 13.4% over the same period in 2020. Of this, exports reached US$28.85 billion, up 11.7% and imports exports reached US$12.4 billion, up 17.6% over the same period in 2020.

In particular, more and more Vietnamese enterprises are taking advantage of incentives from the EVFTA through the use of preferential certificates of origin (C/O).

According to statistics from the Import-Export Department under the Ministry of Industry and Trade, about 207,682 samples of C/O of EUR.1 form were issued in the first year of implementing the agreement for goods worth about US$7.71 billion, shipped to 27 EU countries. Enterprises exporting goods to the EU also carried out self-certification of origin for 6,115 shipments to enjoy preferential tariffs under the EVFTA.

According to Deputy Director of Multilateral Trade Policy (Ministry of Industry and Trade) Ngo Chung Khanh, in the context of complicated pandemic developments, FTAs are an important engine of the economy. 2021 has been a difficult year for the economy in general and enterprises in particular; however, there are still bright spots in the picture.

Import and export turnover, especially export turnover has expanded strongly. In the first eight months of 2021, the export growth rate was more than 20%, even higher than the years before the COVID-19 pandemic. Growth was recorded not only in traditional markets such as China and ASEAN but also the US market and markets that Vietnam has signed FTAs with, especially the EU market. Specifically, Vietnamese posted an export growth rate of about 12% to the EU market in the first eight months of 2021.

Khanh noted that Vietnam's fabric import turnover from the EU has also increased significantly since the effectiveness of the EVFTA while the importation of other commodities such as agricultural products and food into Vietnam helps promote market diversification.

The competitiveness and market share of Vietnamese goods have also improved considerably in the EU market. Vietnam has now risen to become the EU's largest goods trading partner in the ASEAN region, with two-way trade turnover of EUR43.2 billion in 2020 (according to Eurostat's statistics), ranked in the Top 10 of countries supplying goods to the EU market.

With a strong commitment to ensuring transparency, openness and convenience in the business-investment environment, Vietnam has received high-quality investment from the EU with projects using advanced technology, creating common value and benefit for the business communities of both sides.

The EVFTA is one of the FTAs with the best utilisation rate for Vietnam in its first year of implementation. The assessment of the Vietnam Chamber of Commerce and Industry shows that the level of understanding and expectations of businesses for the EVFTA is relatively high compared with other FTAs that have taken effect.

Creating a strong boost in commercial cooperation

In the context of the pandemic, EU countries and Vietnam in particular have implemented solutions to boost the digital economy, especially in terms of e-commerce, to make it one of the priority areas in the post-pandemic economic recovery strategy, opening up the prospect of potential cross-border trade channels in the near future.

At a Vietnam - EU Trade Forum entitled “EVFTA - Leverage for trade and investment cooperation in the new normal” organised by the Ministry of Industry and Trade in collaboration with the European Chamber of Commerce in Vietnam (EuroCham), delegates also highlighted achievements after the first year of the implementation of the agreement.

Deputy Minister of Industry and Trade Dang Hoang An said that the EVFTA is not only a lever to promote two-way trade but also a preeminent advantage for the two sides' businesses in the context of the global economy and trade having been seriously affected by the pandemic. Impressive figures on trade exchange even during the pandemic outbreaks in EU countries and then in Vietnam prove this.

These are particularly remarkable results after one year implementing the agreement. At the same time, it is the basis for us to be optimistic and confident about a strong boost in trade and investment cooperation between Vietnam and the EU in the context of the new normal.

However, many experts also point out many existing challenges, especially the unpredictable developments of the COVID-19 pandemic. Many experts say that Vietnam needs to develop appropriate scenarios to flexibly and effectively adapt to the new situation, unleash all its resources for economic recovery and growth, and ensure supply chains while actively supporting and removing difficulties for businesses, so as not to let the economy miss a beat in the global economic recovery.

According to Ambassador Giorgio Aliberti, Head of the EU Delegation to Vietnam, the EVFTA can promote the export of fruit and agricultural products of Vietnam, especially from the Mekong region. However, businesses still face difficulties entering the EU market, because the paperwork is still complicated, thus it is very important to improve processes and procedures.

Meanwhile, EuroCham President Alain Cany said the two sides need to work closely in solving existing problems for the common benefit of the business community. With the pandemic brought back under control, as well as the great advantages gained from the EVFTA and upcoming EU-Vietnam Investment Protection Agreement (EVIPA), Vietnam will have the opportunity to attract a wave of foreign direct investment from EU investors looking for a stable and safe destination.

In the context of economic recovery and the emergence of new trade and investment trends, it will require great efforts from both sides to make effective use of the EVFTA and seize new opportunities after the pandemic.

Deputy Minister Dang Hoang An said that the Ministry of Industry and Trade and the system of Vietnamese Trade Offices in the EU will make every effort to accompany the businesses of both sides to take full advantage of the EVFTA, creating all favourable conditions to promote economic growth and investment while solving difficulties and problems arising.

Enterprises also need to actively innovate, improve internal capacity, and adjust production and business strategies to quickly adapt to new conditions and fully participate in global supply and value chain restructuring.

We @ PPI Sourcing encourages enterprises based in the European Union to utilize EVFTA by contacting us now for a trusted one-stop solution to source your desired made-in Vietnam products and enjoy ZERO import duties for most.

Source: Nhan Dan Online