Diversification and trade promotion enhancement in European market

To date, Vietnam has signed and implemented 16 Free Trade Agreements (FTAs) to extensive market areas. Currently, the Ministry of Industry and Trade is in negotiations for 3 FTAs with new market regions: Vietnam - EFTA FTA ( Switzerland, Norway, Iceland, Liechtenstein); ASEAN - Canada FTA; and the Comprehensive Economic Partnership Agreement (CEPA) between Vietnam and the United Arab Emirates (UAE). Therefore, opportunities from international economic integration commitments within FTAs remain a central mission and a top priority.

Minister of Industry and Trade Nguyen Hong Dien chaired the meeting of Vietnamese trade counselors in the European region on July 18, 2024 in Rome,

Breakthrough in the Hungarian Market

Hungary has seen notable developments in trade relations with Vietnam in recent years. Bilateral trade between the two countries increased from US$354 million in 2017 to over US$848 million by 2023, averaging a growth rate of 24% per year during this period. Vietnam's exports to Hungary reached US$207 million in 2017 and rose to US$418.5 million by 2023, achieving an average growth rate of 40% per year.

In the first six months of 2024, Vietnam's exports to Hungary rebounded after a difficult 2023, reaching US$314.6 million, a 57.9% increase compared to the previous year.

Tran Ngoc Ha, Head of the Vietnamese Trade Office in Hungary

Tran Ngoc Ha, Head of Vietnamese Trade Office in Hungary, noted that Vietnam's exports mainly consist of electronic components, machinery, equipment, spare parts, transportation vehicles, textiles, metals, products, and coffee. Electronic components represent the highest proportion, currently around 56% of total exports.

However, Tran Ngoc Ha cautioned that relying predominantly on a single product group for exports carries risks and is unsustainable in the long run. Moreover, as analyzed by Tran Ngoc Ha, Hungary’s international fairs and exhibitions have not been suitable for Vietnam's key export sectors.

Therefore, Vietnammese Trade Office in Hungary has been focusing on promoting potential agricultural exports that Hungary lacks, such as coffee, cashews, pepper, and rice, despite the limited capacity.

In addition to organizing and participating in export-related workshops and trade conferences, the Trade Office has organized exhibitions to promote and showcase Vietnamese exports, focusing on advantageous and high-potential products. Furthermore, efforts have been made to invite Hungarian business delegations to events such as Vis2023 and Vis2024, as well as to seek and connect with local importers, distributors, and retailers locally in order to directly export to the Hungarian market.

As a result, in 2023, the Trade Office successfully facilitated the export of ST25 rice from the Hanoi Trade Joint Stock Corporation (Hapro) to the Hungarian market, marking the first appearance of Hapro’s rice in the EU. This contributed to the growth of 170% in Vietnam's rice exports to Hungary in 2023, as well as the increased market share of 6% in 2023. Currently, the Trade Office is also facilitating another Vietnamese exporter's first rice export to the Hungarian market.

Through proactive measures, the Trade Office has successfully connected Vietnamese labor export companies to sign cooperation agreements with Hungarian partners in recent years.

Priority to integrate Vietnamese products into foreign distribution chains

Alongside Hungaria, Germany is Vietnam's most important economic and trade cooperation partner within the EU, and Vietnam has become Germany's number one trading partner in ASEAN. Bilateral trade between the two countries nearly doubled from 2011 to 2023, from US$5.6 billion in 2011 to over US$11 billion in 2023.

In the first six months of 2024, Vietnam-Germany trade reached over US$5.57 billion, a 1.75% increase. Vietnam's exports to Germany reached US$3.82 billion, up 3.2%, while imports from Germany reached approximately US$1.75 billion, down 1.2%. Vietnam-Germany trade accounts for 17% of Vietnam's trade with the EU, with exports accounting for 15% and imports 23%.

Dang Thi Thanh Phuong - Vietnam's Trade Counsellor in Germany

Despite these positive results, Dang Thi Thanh Phuong - Vietnam's Trade Counsellor in Germany believed they have not matched the potential of the two countries. Therefore, to enhance trade promotion and market diversification, the Trade Office has prioritized business connectivity to integrate Vietnamese products into foreign distribution chains.

Specifically, efforts have been made to support economic and trade cooperation between Vietnamese localities and German cities and states, to increase recognition of Vietnamese products in localities with few Vietnamese residents, to strengthen Vietnamese participation in specialized trade fairs, and to inform relevant agencies on the importance of trade fairs and to support enterprises participation in trade fairs such as Fruit Logistica, Biofach, Anuga, ITB, Fish International, Ambiente, Hannover Messe...

To expand the market for Vietnamese exports, the Trade Office has established a website to provide two-way information and communications for authorities and businesses. Additionally, the Trade Office promised to continuously promote Vietnamese products through Germany's distribution systems and within the Vietnamese community in Germany.

Identifying priority areas for market diversification in export markets

According to Vu Anh Son, Head of Vietnam's Trade Office in France, there has been stable demand for Vietnamese agricultural and aquatic products in France and in Europe in general. Thus the Trade Office aims to support Vietnamese enterprises to maintain market share and implement actions to increase market demand for Vietnamese goods.

Vu Anh Son, Head of the Vietnam's Trade Office in France

Vietnam's Trade Office in France has achieved specific results in market diversification and trade promotion. In 2021, the Trade Office introduced fresh fruit from Vietnam to France, particularly fresh lychees and longans. In addition, with the Trade Office’s support, canned fruit also entered the supermarket system in France for the first time in 2021.

In 2022, the Trade Office has successfully introduce Vietnamese rice brands to major supermarket chains in France. While in 2023, the Trade Office organized a series of weekly events at major French supermarkets such as Vietnamese Lunar New Year Week at Carrefour; Vietnamese Mid-Autumn Festival Week at E.Leclerc; as well Vietnamese Rice Introduction Week across multiple supermarkets...

In 2024, the Trade Office has collaborated with the Vietnam Cultural Center in France to organize a comprehensive promotional program for Vietnamese lychees. As a result, Vietnamese lychees reached a new milestone in export value, with nearly 20 tons of lychees imported and distributed by Vietnamese companies.

To increase the market for Vietnamese rice exports and domestic goods, Son believed that domestic export companies need to improve product quality and focus on brand building in order to create trust with consumers and partners in France.

In the future, the Trade Office will make more efforts in market research and connect with partners in the fields of industrial, manufacturing, and energy, especially renewable energy. Thus, the Trade Office will prioritize tasks such as: Connecting investment cooperation in industrial sectors, especially foundational industries; diversifying raw material supplies to domestic manufacturing sectors; promoting cooperation with foreign countries; Seeking, connecting, and attracting investment in production stages; supplying materials, equipment to serve the development of the energy sector, especially renewable energy; Promoting the export of potential agricultural and aquatic product groups.

The meeting of Vietnamese trade counselors in the European region was organized to enhance economic and trade activities, foreign market work, and trade promotion to contribute to enhancing Vietnam's exports to countries in the region and the world; and aiming to strengthen connection, coordination, and support for enterprises in promoting export activities.

In his opening speech at the Official Working Session, Minister Nguyen Hong Dien acknowledged and highly appreciated the achievements of the Trade Counsellors in the past period. Thanks to proactive efforts in researching, evaluating, synthesizing market situations, and the new policy mechanisms of host countries, the Trade Counsellors have advised and consulted State Management Agencies and Associations, domestic enterprises, resulting in timely policy responses and adjustments to production and business plans, which are appropriate and effective.

The efforts of Vietnam's Trade Office system abroad (including the Trade Counsellors in the European region) have contributed to elevating Vietnam from a slow-developing country to one of the 40 countries with the largest GDP in the world; ranked in the top 20 economies in terms of trade, top 15 in attracting foreign investment, and top 46 in the Innovation Index.

Despite global and regional economies showing signs of recovery, global trade is facing numerous difficulties and new challenges, particularly in the European market - the focal point of geopolitical and economic competition. Therefore, Minister Nguyen Hong Dien has instructed Trade Officials and leaders of the departments within the Ministry of Industry and Trade to focus on discussing and evaluating opportunities, advantages, difficulties, and obstacles in trade and export promotion, as well as markets developments.

Additionally, leaders of these departments are required to propose and recommend solutions and initiatives to enhance economic and trade cooperation between Vietnam and partners in Europe, using frameworks of strategic partnerships, comprehensive partnerships, and free trade agreements to expand and diversify markets, products, supply chains, boost exports, as well as build and enhance the Vietnam Trade Missions abroad into dynamic, professional, and efficient agencies, best serving the country's economic development and the business community."