Bright spots in trade relations between Vietnam and the EU after 4 years of the EVFTA coming into effect

Exports to most key markets in the EU increased.

EVFTA is a new generation free trade agreement that helps connect Vietnam with the economies of 27 EU member countries, with commitments in many areas and a higher level of commitment than most FTAs ​​that Vietnam has signed.

In 2023, trade turnover between Vietnam and EU member countries will reach 72.3 billion USD, down 5.3% compared to 2022, with a trade surplus of 34.3 billion USD. Vietnam's export turnover to EU countries in 2022 will reach 46.8 billion USD, up 16.7% compared to 2021. Import turnover from EVFTA countries will reach 15.4 billion USD, down 8.6% compared to 2021. Many important Vietnamese exports 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...

After 4 years of taking effect, the EVFTA Agreement contributes to strengthening Vietnam's position in Europe.

According to statistics from the General Department of Customs, 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.

In the first 6 months of 2024, exports to most key markets in the EU increased in turnover 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.

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 their production processes 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.

Ms. Nguyen Cam Trang - Deputy Director of the Import-Export Department (Ministry of Industry and Trade) 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.

EVFTA contributes to strengthening Vietnam's position

According to experts, since its entry into force, the EVFTA has basically achieved its set goals in promoting the overall relationship between the two sides. The proportion of Vietnamese exports to the EU market has increased and Vietnam has become the country with the largest market share compared to other ASEAN countries exporting to the EU. EVFTA helps more EU importers to know Vietnamese suppliers…

According to a survey by VCCI (Vietnam Federation of Commerce and Industry), the rate of enterprises understanding EVFTA is higher than other FTAs, nearly 50% of enterprises have enjoyed specific benefits from EVFTA, export turnover from Vietnam to the EU increased by 16.7% in 2022 and nearly 20% in 2023.

Mr. Dominik Meichle, Chairman of the European Chamber of Commerce (Eurocharm) in Vietnam, assessed that EVFTA has helped Vietnam gain an advantage in becoming one of only two ASEAN countries (along with Singapore) to have a free trade agreement with the EU.

The President of Eurocharm also acknowledged that EVFTA has been contributing to strengthening Vietnam's position as an attractive destination for European investment, creating a "push" to attract FDI capital flows from the EU to Vietnam.

EVFTA has contributed to making the EU the 6th largest FDI investor in Vietnam with 2,450 projects and a total investment capital of more than 28 billion euros. Even though the Vietnam – EU Investment Protection Agreement (EVIPA) is still in the process of ratification and has not been implemented.

Mr. Dominik Meichle cited that, in the context of the global FDI trend declining, large enterprises in the EU still believe in Vietnam's potential and invested more than 800 million euros in just 9 months (from January to September 2023).

According to the EuroCham Business Confidence Index, a quarter of EuroCham Vietnam members said they are benefiting from the EVFTA through tariff reductions, better market access and increased competitiveness.

EuroCham representatives expect that in the coming time, EVFTA will continue to bring about more positive and far-reaching impacts, promoting a transparent business environment, thereby creating conditions for mutually beneficial results for both the EU and Vietnam.