After 4 years of implementation, the Vietnam – EU Free Trade Agreement (EVFTA) has brought about positive results: Expanding the market for Vietnam’s key export industries such as textiles, footwear, agricultural products, etc. and creating opportunities for domestic enterprises to access EU equipment, technology, and high techniques, while helping Vietnam have conditions to further improve its institutions, policies, and laws in a more transparent and consistent manner with international practices.
Positive impacts
Effective from August 1, 2020, EVFTA is one of Vietnam's first new-generation Free Trade Agreements (FTAs) and also the first new-generation FTA that the EU has signed with a developing country in the Asia-Pacific region.
After 4 years of implementation, Vietnam's export turnover to the EU increased by nearly 50%, making Vietnam the EU's leading trade partner among ASEAN countries. In the opposite direction, Vietnam's imports from the EU also increased by more than 40%.
Statistics from the General Department of Customs show that in 2023, trade turnover between Vietnam and EU member countries will reach 72.3 billion USD, with a trade surplus of 34.3 billion USD. Many important Vietnamese products exported to the EU will continue to increase, such as: Seafood up 29.5%, vegetables and fruits up 34.2%, footwear up 49.7%, textiles up 43.4%, wood and wood products up 85.2%... The main export markets are the Netherlands, Germany, Italy, Belgium, France...
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| After 4 years of implementation, the Vietnam – EU Free Trade Agreement (EVFTA) has brought positive results. Illustrative photo |
In June 2024, the export turnover of goods to the EU increased by 7.85% compared to May 2024 and increased by 19.54% compared to June 2023, reaching over 4.28 billion USD. In the first 6 months of 2024, the export turnover of goods to the EU reached over 24.69 billion USD, an increase of 15.37% over the same period in 2023.
Exports to most key markets in the EU increased in value compared to the same period in 2023. Of which, the largest export to the Netherlands market reached over 6.14 billion USD, accounting for 24.88% of the total export turnover of goods to the EU, up 27.12% over the same period in 2023; in June 2024 alone, the turnover reached nearly 1.15 billion USD, up 13.59% over May 2024 and up 35.46% over June 2023.
Ranked second is the German market, reaching nearly 3.82 billion USD, accounting for 15.46%, a slight increase of 3.27%; in June 2024 alone, the turnover reached over 634.96 million USD, an increase of 7.73% compared to May 2024 and an increase of 7.13% compared to June 2023.
Ranked third is the Italian market, reaching nearly 2.53 billion USD, accounting for 10.23%, up 9.23%; in June 2024 alone, the turnover reached 385.97 million USD, up 0.6% compared to May 2024 and up 4.27% compared to June 2023.
Exports to the Spanish market reached nearly 1.97 billion USD, accounting for 7.96%, up 20.68%; in June 2024 alone, the turnover reached 308.19 million USD, up 7.51% compared to May 2024 and up 3.38% compared to June 2023.
Notably, thanks to the EVFTA, Vietnamese consumers are increasingly having more opportunities to access a variety of high-quality products from Europe at more reasonable prices, as import taxes on many products from Europe to Vietnam are being reduced to 0% according to the commitment of the EVFTA. People have been able to buy agricultural products from Europe (such as: Vegetables, fruits, milk and cereals) at reasonable prices; along with that, many imported goods such as: Machinery and equipment from Europe are also starting to decrease according to the roadmap, helping domestic enterprises improve the production process and create products with high added value.
On the other hand, industries with export advantages to the EU such as textiles, footwear and transportation have created many new jobs for Vietnamese workers. Workers also have the opportunity to improve their professional qualifications to meet new requirements from EVFTA.
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| In the first 6 months of 2024, the total export turnover of goods to the EU reached over 24.69 billion USD, an increase of 15.37% over the same period in 2023. Illustrative photo |
“The implementation of the EVFTA has marked an important step in the 30-year process of cooperation and development between Vietnam and the EU, opening a new phase for the comprehensive partnership to become more in-depth, practical and effective, ” said Mr. Trinh Minh Anh - Chief of Office of the Steering Committee for International Economic Integration. After 4 years of implementing the EVFTA, the positive impacts of this agreement on the development of Vietnam - EU trade relations have been shown.
Mr. Phan Van Co - Marketing Director of Vrice Company Limited said that thanks to the tariff incentives from EVFTA, Vietnam's rice exports to the EU market have more competitive advantages than rice in other markets. Although the volume of rice exports to the EU is not much, Vietnam has exported high-quality rice varieties, especially fragrant rice with high value.
Sharing the joy with rice, Mr. Dang Phuc Nguyen - General Secretary of the Vietnam Fruit and Vegetable Association shared that domestic fruit and vegetable exporting enterprises have taken advantage of the opportunities from EVFTA to boost exports to key markets. Currently, the EU is the third largest fruit and vegetable export market of Vietnam. If in 2023, fruit and vegetable exports to the EU increased by 30% compared to 2022, this year, it is forecasted that fruit and vegetable exports to this market will continue to grow by double digits, estimated at more than 300 million USD.
Vietnamese coffee is also a product that benefits greatly from FTAs, including EVFTA. According to the Vietnam Coffee and Cocoa Association (Vicofa), in 2022, Vietnam's coffee exports will reach over 1.77 million tons, worth over 4.05 billion USD. The EU market alone accounts for 38.3% of the country's total coffee export volume. In 2023, the EU spent about 1.66 billion USD purchasing coffee from Vietnamese suppliers. EVFTA has helped the coffee industry increase value and continue to expand its market share here.
Not only that, in recent times, the EVFTA has contributed to improving the business environment, facilitating investment and promoting direct investment from the EU and other countries in Vietnam. Investment in Vietnam is increasing due to taking advantage of the advantages created by the EVFTA, attracting more and more investment capital into high-tech manufacturing sectors, attracting large capital flows into high-quality service sectors such as finance, banking, insurance, energy, telecommunications, transportation, etc. According to statistics, as of May 20, 2024, the total FDI of the EU in Vietnam reached 29.88 billion USD (excluding investment through third parties). The EU ranks 5th out of 140 countries and territories with investment capital in Vietnam.
Make good use of the C/O "passport"
Along with the propaganda efforts of functional agencies, localities, and the media, proving the origin of goods is increasingly of interest to Vietnamese enterprises, and the Certificate of Origin (C/O) plays the role of a "golden key" to help enterprises expand exports, especially helping goods take advantage of tariff incentives under trade agreements from EVFTA.
According to statistics from the Import-Export Department (Ministry of Industry and Trade), in 2023, the rate of using C/O form EUR.1 will be 35.2% of export turnover, equivalent to the export turnover using C/O of 15.4 billion USD, an increase of 26.1% compared to 2022.
Some commodity groups have a very good rate of using preferential C/O form EUR.1 such as seafood (89.2%), vegetables and fruits (88.3%), rice (fully utilizing the quota of 80,000 tons of EU rice for Vietnam every year). Footwear - one of Vietnam's main export items to the EU market with an export turnover of 4.8 billion USD, has a rate of granting preferential C/O form EUR.1 of up to nearly 100%. In the first quarter of 2024, the rate of using C/O form EUR.1 is 34.3%.
“The above results show that EVFTA has initially brought into play the effectiveness of a substantive and highly anticipated agreement, but this is still an agreement with a lot of room for exploitation” – the leader of the Import-Export Department shared and added that, to take advantage of the space brought by the EVFTA, in the recent past, Vietnam has made efforts to negotiate with the EU to unify the understanding of specific criteria for goods in a direction that is consistent with modern production practices, creating favorable conditions for export enterprises (such as textiles). Regarding rice quotas, the Ministry of Industry and Trade is coordinating with the Ministry of Agriculture and Rural Development to negotiate amendments to the list of rice varieties to match the current strengths of Vietnam’s rice varieties (such as ST 24 rice, ST 25 rice), replacing DT8 and OM5451 rice varieties.
Obviously, the EVFTA is considered one of the good supports for Vietnam - EU trade. Many ASEAN countries are trying to have an Agreement like Vietnam. Therefore, Mr. Tran Ngoc Quan - Trade Counselor of the Vietnam Trade Office in the EU and Belgium said that protecting the benefits of EVFTA is extremely necessary. And this comes from ensuring that Vietnamese goods are produced and exported in a methodical manner, in good compliance with EU regulations, especially on product quality and safety.
Notably, according to Mr. Tran Ngoc Quan, currently, a number of Vietnamese product lines are being investigated or taxed, which directly affects the benefits from EVFTA. Therefore, Vietnamese goods exported to the EU need to ensure that there are no goods from third countries disguised in Vietnam to benefit from EVFTA or entering Vietnam to avoid self-defense taxes, dumping and then exporting to the EU.
Ms. Nguyen Cam Trang - Deputy Director of the Import-Export Department (Ministry of Industry and Trade) also recommended that Vietnamese enterprises should proactively take advantage of opportunities from EVFTA, grasp information about the world market, impacts of the world economy... to be proactive in production, business and delivery plans. At the same time, proactively innovate production and business methods, innovate technology, create quality products, better meet the needs of the EU market.
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