Vietnam Tops EU Trade in ASEAN

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Footwear is one of Vietnam's main export items to the EU market with a preferential C/O rate of EUR.1 up to nearly 100%.

The Ministry of Industry and Trade of Vietnam shared that after 4 years of the Vietnam - EU Free Trade Agreement (EVFTA) coming into effect (August 1, 2020 - August 1, 2024), the proportion of Vietnamese goods exported to the EU market has increased and Vietnam has become the country with the largest market share compared to other countries in the ASEAN region exporting to the EU. Accordingly, EVFTA helps more EU importers know about Vietnamese suppliers.

In 2023, trade turnover between Vietnam and EU member countries was US $72.3 billion, down 5.3% compared to 2022, with a trade surplus of US $34.3 billion.

Vietnam's export turnover to EU countries in 2022 reached US $46.8 billion, up 16.7% compared to 2021 while the import turnover from EVFTA countries reached US $15.4 billion, down 8.6% compared to 2021.

Many important Vietnamese products exported to the EU continued to increase, such as seafood up 29.5%, vegetables and fruits up 34.2%, footwear up 49.7%, textiles up 43.4%, wood and timber products up 85.2%.The main export markets are the Netherlands, Germany, Italy, Belgium, and France.

According to statistics from the General Department of Customs of Vietnam, the export turnover of goods to the EU in June 2024 reached over US $4.28 billion, an increase of 7.85% compared to May 2024 and an increase of 19.54% compared to June 2023.

In the first 6 months of 2024, the total export turnover of goods to the EU reached over US $24.69 billion, an increase of 15.37% over the same period in 2023. Exports to most key markets in the EU increased in turnover compared to the same period in 2023.

Of which, the largest export to the Netherlands market reached over US $6.14 billion, accounting for 24.88% of the total export turnover of goods to the EU, up 27.12% over the same period in 2023. In June 2024 alone, the turnover reached nearly US $1.15 billion, up 13.59% over May 2024 and up 35.46% over June 2023.

The German market ranked second with nearly US $3.82 billion, accounting for 15.46%, a slight increase of 3.27%. In June 2024 alone, the turnover reached over US $634.96 million, an increase of 7.73% compared to May 2024 and an increase of 7.13% compared to June 2023.

Ranked third is the Italian market with nearly US $2.53 billion, accounting for 10.23%, up 9.23%; in June 2024 alone, the turnover reached US $385.97 million, up 0.6% compared to May 2024 and up 4.27% compared to June 2023.

Exports to the Spanish market reached nearly US $1.97 billion, accounting for 7.96%, up 20.68%; in June 2024 alone, the turnover reached US $308.19 million, up 7.51% compared to May 2024 and up 3.38% compared to June 2023.

The Ministry of Industry and Trade of Vietnam also stated that bilateral trade between the two sides is increasingly vibrant thanks to the EVFTA. Domestic consumers have more and more opportunities to access diverse, high-quality products from Europe at more reasonable prices.

On the other hand, Vietnam’s advantageous export industries to the EU such as textiles, footwear, and transportation have created many new jobs for Vietnamese workers. Workers also have the opportunity to improve their professional qualifications to meet new requirements from EVFTA.

Not only that, a survey by VCCI (Vietnam Federation of Commerce and Industry) shows that the rate of businesses understanding EVFTA is higher than other FTAs. Nearly 50% of businesses have enjoyed specific benefits from EVFTA, with export turnover from Vietnam to the EU increasing by 16.7% in 2022 and nearly 20% in 2023.

Notably, the rate of utilizing the EUR.1 C/O incentives is high. According to statistics from the Import-Export Department (Ministry of Industry and Trade), in 2023, the rate of using EUR.1 C/O will be 35.2% of export turnover, equivalent to the export turnover using C/O of US $15.4 billion, an increase of 26.1% compared to 2022.

Some product groups have a high rate of using preferential C/O form EUR.1 such as seafood (89.2%), vegetables and fruits (88.3%), and rice (fully utilizing the quota of 80,000 tons of EU rice for Vietnam every year).

In particular, footwear is one of Vietnam's key export items to the EU market with an export turnover of US $4.8 billion, with a preferential C/O rate of EUR.1 reaching nearly 100%. Most recently, in the first quarter of 2024, the C/O rate of EUR.1 was 34.3%.

At a working session on July 30 with Vice President of the European Commission (EC) Josep Borrell Fontelles, High Representative of the European Union (EU) for Foreign Affairs and Security Policy, Vietnam's Minister of Foreign Affairs Bui Thanh Son emphasized that the two sides need to continue to closely coordinate to effectively implement the EVFTA.

Minister Bui Thanh Son also proposed that the EC soon remove the “yellow card” on Vietnam’s seafood exports based on Vietnam’s efforts and achievements in preventing illegal, unreported and unregulated (IUU) fishing, and that the EU urge the remaining EU member states to soon ratify the Vietnam-EU Investment Protection Agreement (EVIPA) to develop bilateral economic cooperation that meets the potential and desires of both sides.

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