EVFTA increases trade with EU

Export shrimp processing facilities comply with import markets’ strict regulations on food safety and hygiene

According to the Ministry of Industry and Trade, the trade in goods between Vietnam and the EU hit US$56.8 billion in 2021, including US$39.9 billion worth of Vietnam’s exports (up 13.5 percent from the same period of 2020) and US$16.9 billion worth of the country’s imports (up 15.5 percent). Vietnam exported US$23 billion more than it imported in the same year.

Last year, Vietnam exported goods worth US$47.1 billion (up 17.4 percent) to and imported goods worth US$15.3 billion (down 9.4 percent) from the EU, achieving a trade surplus of about US$31.8 billion. Vietnam’s trade with the EU reached US$29.29 billion in the first five months of 2023.

According to the European Union Delegation to Vietnam, the EVFTA allows Vietnamese exporters to access more than 450 million European consumers whose disposable incomes top the world. Since the enforcement of the EVFTA, around 85.6 percent of all tariff lines have been eliminated fully for Vietnamese commodities. This represents 70.3 percent of Vietnam’s total exports to the EU. Such progressive elimination of import duties explains the 20 percent year-on-year surge of Vietnam’s exports to the EU.

Giorgio Aliberti, Ambassador and Head of the European Union Delegation to Vietnam, said that since the EVFTA took effect in August 2020, the EU has for the first time preferential access to a vibrant economy of almost 100 million inhabitants with the fastest-growing middle class in ASEAN (the Association of Southeast Asian Nations) and a young and dynamic workforce.

In fact, the EVFTA has put the EU exporters and investors at least on a par with those from other countries and regions, which have already concluded free trade agreements (FTAs) with Vietnam, such as ASEAN, Australia, China, India, Japan, the Republic of Korea and member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Vietnam’s vegetable and fruit exports hit almost US$1 billion in June 2023 (2.7 times that in June 2022), taking the total in the first half of 2023 to US$3 billion, nearly equal to the 2022 figure – US$3.16 billion

In 2021, the value of Vietnamese exports to the EU using C/O form EUR.1 reached US$8.1 billion, making an account for 20.2 percent of the total export turnover to the EU or 24.4 percent rise against the same period in 2020.

In the first 10 months of 2022, the rate of taking advantage of incentives from the EVFTA stood at 25.1 percent, with an increase of more than 30 percent over the same frame last year.

The Vietnam Chamber of Commerce and Industry (VCCI) reported that four out of 10 Vietnamese businesses benefited from the EVFTA.

The EVFTA will eventually phase out almost 99 percent of tariff lines within 10 years. Even during an unpredictable global pandemic, the agreement has delivered on its promises. As much as 48.5 percent of the tariff lines or nearly 65 percent of the EU exports to Vietnam and 71 percent of Vietnamese exports to the EU have enjoyed zero tariffs since the trade deal entered into force.

The Ministry of Industry and Trade will coordinate with relevant ministries and sectors to solve problems through updating the Vietnam Free Trade Agreement Portal (FTAP) in order to connect with all websites of ministries, sectors and associations, and assess the implementation of FTAs in provinces and cities through the FTA INDEX, which is expected to be published later this year.