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The European Union, a market of 500 million people, has an annual GDP of US$18 trillion. The EU is Vietnam’s second most important partner and a huge potential market for large, small, and medium-sized exporters, VOV reported.

Nguyen Ngoc Trieu, Deputy Chairman of the Vietnamese Business Association in Russia, said, “Vietnamese goods have strengthened their foothold in the local market and are popular among local consumers. This is what the FTA has brought us. But most Vietnamese exports to Russia are just raw materials processed and resold by large Russian corporations.”

“Vietnamese enterprises need to engage more in the supply chain from production to consumption. Hopefully, the EVFTA will help Vietnamese businesses become more competitive and Vietnamese brands more widely known,” said Trieu.

The price of Vietnamese rice export to the EU has benefited from the EVFTA. Photo: Congthuong.vn

The EVFTA is expected to boost Vietnam's exports, especially agricultural and aquatic products, and other items in which Vietnam has a competitive advantage

Among 1 million Vietnamese living in Europe, tens of thousands are business people. During the past few years, overseas Vietnamese businesses have helped domestic ones find investment opportunities and expand their business into the European and other international markets.

Hoang Xuan Binh, Chairman of the Vietnamese Business Association in Poland, suggests ways to boost exports to the EU market, “Domestic businesses need to improve their products’ quality toward EU standards, build brands, and proactively promote their products in the EU.”

“They should make a long-term cooperation plan with overseas Vietnamese businesses to explore the market, conduct marketing, promote and distribute products in the EU, and build a logistics model to support import and export activities”, he added.

Hoang Xuan Binh, Chairman of the Vietnamese Business Association in Poland Photo courtesy of Ministry of Industry and Trade

Overseas Vietnamese businesses agree that, unlike Asian countries, EU countries are concerned about financial information and the production capacity of businesses.

It’s important to connect domestic businesses with OV businesses or Vietnamese experts working in the EU to gain an understanding of the EU market, said Vo Van Long, Chairman of the Vietnamese Business Association in Germany.

“With the EVFTA, we hope to increase cooperation with businesses in Vietnam to import commodities in high demand in the EU, like footwear, machinery, household appliances, and pharmaceuticals,” said Long.

By working closely with overseas Vietnamese, made-in-Vietnam products have become popular in the European market. This has helped promote Vietnamese culture. Vietnamese traditional long dresses – ao dai – made by fashion designer Miss Ngoc Han are a good example.

Han told VOV, “I’ve designed and made many ao dai for ambassadors’ spouses and organized exhibitions to introduce Vietnam’s iconic dress worldwide. I have worked with OVs to set up associations of ao dai fans.”

Vietnam has signed many new generation trade agreements, of which the EVFTA is benefiting Vietnamese businesses the most.

EU increases investment connection with Vietnamese businesses

Enterprises from a number of EU member countries have already made efforts to take full advantage of the EU-Vietnam Free Trade Agreement (EVFTA) and make moves into the Vietnamese market, VOV reported.

In contrast to a decline in imports from major markets such as the Republic of Korea (RoK), which reached US$28.7 billion, down by 8.3%, and ASEAN at US$19.4 billion, down 9.2%, the past eight months have seen the EU increase imports from the nation, with a value of US$ 9.5 billion, an annual rise of 4.7%.

Most notably, the implementation of the EVFTA from August 1 has served to stimulate trade and investment flows, with EU businesses taking advantage of the benefits of the trade pact to enjoy a range of economic upsides.

The prolonged impact of the novel coronavirus (COVID-19) has served to hinder trips by EU firms to the country. Due to there being no clear end to the epidemic, investment and trade connection activities have been occurring in a variety of ways, with as many as 100 Dutch businesses launching a range of online investment and trade activities with Vietnamese enterprises during the first week of September.

An Italy- invested Piaggio motorcycle assembly line in Vinh Phuc Province Photo: VOV

Joost Vrancken Peeters, chairman of the Netherlands-Vietnam Chamber of Commerce (NVCC), said that the European country attaches great importance to the Vietnamese market, as reflected by the capital amount invested into the Vietnamese market over the years.

As a means of making the most of the EVFTA, the Netherlands has conducted research on shifting investment and the diversification of supply sources. These are considered to be the main drivers and obstacles of Dutch enterprises when investing in the nation as they strive to find ways in which to overcome issues to open up investment activities.

Processing Tra fish for export Photo: VNA

Among the 27 EU member states already involved in investment activities locally, the Netherlands takes the lead in terms of registered capital. Indeed, by the end of 2019, the European nation had 344 projects worth a total of US$10.05 billion, making up 39.43% of the total EU investment capital in the Southeast Asian nation.

Furthermore, the Netherlands is also the EU's second-largest trading partner in Vietnam, with bilateral trade in 2018 reaching US$7.8 billion, behind only Germany.

In addition to the involvement of Dutch firms, Bulgaria also has a modest trade and investment relationship with the country and is actively seeking to increase commitments in line with the EVFTA.

Yana Topalova, the Bulgarian Deputy Minister of Economics, said that the trade is very important for the Eastern European nation due to Vietnam significantly increasing its influence in the region as well as worldwide.

“Bulgarian businesses want to exploit the EVFTA to build strong trade ties from value chain creation. The Bulgarian Ministry of Economics and Government will continue to give incentives to Vietnamese businesses who invest in and have trade links with Bulgaria,” said Deputy Minister Topalova.

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