VietnamCredit About Us Cafe€redit Contact Us
Go to cart
Vietnam’s companies have yet to grasp the full potential of EVFTA

Vietnam’s companies have yet to grasp the full potential of EVFTA

Wednesday 28, 12 2022
After 2 years of implementing the EVFTA, bilateral trade turnover between Vietnam and the EU has achieved impressive growth. However, the penetration of Vietnamese goods into this market is still limited.

Positive results

According to the Ministry of Industry and Trade, although the EVFTA was implemented when the Covid-19 pandemic was complicated, Vietnam's exports to the EU and bilateral trade still experienced impressive growth.

Vietnamcredit EVFTA

In the first year of EVFTA implementation (2020), bilateral trade between Vietnam and the EU reached 54.9 billion USD, up 12.1% over the same period last year, of which exports reached 34.5 billion USD, up 11.3 %. In 2021, it reached 61.4 billion USD, up nearly 11.9%, of which exports will reach 45 billion USD, up 17% compared to 2020.

In the past 11 months of 2022, bilateral import and export turnover between Vietnam and the EU reached 57 billion USD, up 14% over the same period, of which exports reached 43.5 billion USD, up 21%. Notably, Vietnam's industry structure and key products' export turnover have recovered and significantly increased, such as textiles and garments up 24%, footwear up 19%, seafood up 41%, etc.

Deputy Minister of Industry and Trade Tran Quoc Khanh said that Vietnam's exports to the EU have witnessed a positive shift. Exports not only focus on large markets such as Germany, the Netherlands, and France but are gradually being extended to niche markets such as Northern Europe, Eastern Europe, or Southern Europe. In addition, the import and export of goods between Vietnam and the EU are also complementary, not directly competitive, so the market space is still relatively large for enterprises to promote the exploitation and consumption of Vietnamese products.

Until this moment, up to 40% of Vietnamese enterprises have benefited from EVFTA, especially from tariff preferences for import and export goods and positive effects in increasing orders, revenue, and profits.

"The above positive results show that Vietnamese enterprises have made relatively effective use of opportunities from EVFTA," Deputy Minister Tran Quoc Khanh emphasized.

From the perspective of enterprises, the Export Sales Director of Loc Troi Group, Nguyen Van Hieu, shared that the EVFTA has created an opportunity for the unit to increase the export turnover of rice products to the EU market. Specifically, in 2018, enterprises only exported 2,000 tons of rice to this market, but by 2020 the number had reached 11,000 tons. In 2021 it reached 12,000 tons, and it is expected that in 2022, the export turnover will be up to 21,000 tons.

Vietnamcredit Loc Troi Group

The business community highly appreciates the support from the Ministry of Industry and Trade, the deals in foreign countries, etc., which have supported businesses in trade promotion activities, market expansion, and information provision on EVFTA and other FTAs. That will help Vietnam's enterprises to apply the tariff commitments of the EVFTA Agreement quickly, accurately, and effectively.

Plenty of room for growth

Although the potential and opportunities from the EU market are still very large, according to the Ministry of Industry and Trade, Vietnamese enterprises still face many difficulties and obstacles when accessing this market.

More specifically, the fact that the Vietnamese brand has not been built or is not well known in European countries, and the value and benefits that Vietnamese businesses earn are still not commensurate with the potential.

The room for trade and investment cooperation in the EVFTA is still very large because while the export growth rate reaches double digits, the share in the EU market in Vietnam's total export turnover is still very modest.

Vietnamcredit Plenty of room for growth

Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department, stated that if, in 2019, Vietnam's exports to the EU (including the UK) reached 46.4 billion USD, accounting for 17.5%, then in 2020, the percentage was only 12.4% (excluding the UK) and dropped to 11.9% in 2021.

Moreover, despite having high preferential utilization rates, many commodities, such as aquatic products, vegetables, etc., have a small export value.

Currently, aside from several businesses and products that have a strong foothold in the EU, many others are struggling to access this market because they mainly process products for foreign partners.

In the coming time, the Ministry of Industry and Trade plans to assist companies in exploiting the untapped potential provided by the EVFTA, boosting Vietnam's presence in the EU market.


Compiled by VietnamCredit


You may also like

3 scenarios on UK-Vietnam trade relations with Brexit and EVFTA
Thursday 06, 02 2020

3 scenarios on UK-Vietnam trade relations with Brexit and EVFTA

An important aspect of Brexit is likely to be the UK's separation from...
EVFTA to be signed soon
Friday 10, 01 2020

EVFTA to be signed soon

Deputy Prime Minister Vuong Dinh Hue said that the preparations for the...
+84 981861066