EVFTA opens new opportunities for Vietnam’s exports

Data from the Ministry of Industry and Trade show that within three years of EVFTA implementation (August 1, 2020 - August 1, 2023), Vietnam exported to the EU nearly US$128 billion worth of goods. In the last five months of 2022, the export value reached US$15.62 billion, up 3.8 percent compared with the same period of 2019. In 2021, the export value reached US$40.12 billion, an increase of 14.2 percent, yielding a trade surplus of US$23.23 billion. In 2022, exports to the EU reached US$46.8 billion, with a trade surplus of US$31.4 billion. In the first seven months of 2023, the export value reached US$25 billion.

Processing seafood for export - photo: VNA

According to the Vietnam Chamber of Commerce and Industry (VCCI), the percentage of businesses with good knowledge of the EVFTA is considerably higher compared with other FTAs.

Vu Anh Son, Head of the Vietnam Trade Office in France, affirmed the EVFTA’s positive effects on Vietnamese exports. “The EVFTA increases Vietnam’s prestige as the first developing country to have a new-generation trade agreement with high-level commitments with the EU,” Son said.

From a macro point of view, the EU believes Vietnam will be an important and reliable partner in its strategy for access to Southeast Asian and other Asian countries. At the micro level, Vietnam’s prestige is one of the important factors encouraging European companies to increase or begin trade exchange with Vietnamese partners.

Economists believe the EVFTA will help reduce Vietnamese farm produce’s dependence on the Chinese and Southeast Asian markets, promoting the establishment of new relations and new networks to enable Vietnam’s participation in regional and global supply chains. Notably, the trade deal will bring cooperation opportunities for Vietnam’s access to capital resources, modern farm produce processing technologies and effective management methods.

The EVFTA has urged Vietnam to accelerate comprehensive agricultural restructuring to increase the added value of farm produce, to promote green and clean agriculture, and to ensure that agricultural products are made in accordance with their geographical indications.

The EVFTA not only helps Vietnam attract more investment from European countries, but it also enables Vietnam to boost on-spot exports. Nguyen Thi Hoang Thuy, Vietnamese Trade Counselor in Sweden and North European countries, said that Vietnam attracts EU firms in general and those from Northern Europe in particular since it is a market of nearly 100 million consumers, with a rapidly growing middle class and a young workforce.

This can be seen in the agricultural and fishery sectors. The export value of these sectors increased annually in the 2020-2022 period, for example rice exports up 26.2 percent; seafood up 9.1 percent; pepper up 14.1 percent; and coffee up 12.2 percent. Notably, rice exports to Sweden grew remarkably from several tens of thousands of US dollars in the past to more than US$4 million in 2022.

However, to benefit from the EVFTA’s tariff preferences, Vietnamese businesses must abide by the EU’s rules of origin at all stages including material production, as well as other strict regulations related to the environment and technical standards.