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Vietnam's exports to EU reached US$3.78 billion since enforcement of EVFTA

08:42 | 23/09/2020

Within only one month since the EU - Vietnam Free Trade Agreement (EVFTA) took effect in early August, Vietnam exports to EU reached US$3.78 billion.

first batch of fragrant rice to be exported under evfta First batch of fragrant rice to be exported under EVFTA
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the first 296 tons of coffee exported to eu after the free trade agreement The first 296 tons of coffee exported to EU after the Free Trade Agreement

The latest statistics from the General Department of Vietnam Customs showed that by the end of August, total export turnover from Vietnam to the EU had reached US$25.92 billion. In August alone, the figure reached US$3.78 billion, Nhan Dan Newspaper.

Compared with the average of the first seven months this year, export value to the EU in August was about US$600 million higher, thanks to the positive effects of the EVFTA.

According to the Ministry of Industry and Trade, the effective EVFTA has created a great opportunity for Vietnam's exports, helping to diversify markets and products for Vietnam export activities, with some of Vietnamese key products enjoying high tax cuts, such as agricultural products, fisheries, furniture, textiles, footwear and electronics. The EU has been the third largest market for Vietnamese exports over the past eight months.

After more than a month since the agreement came into force, a range of Vietnam’s export products has seen positive changes in the EU market, including some that have been exported recently such as brackish shrimp from Ninh Thuan, coffee and passion fruit from Gia Lai and rice from Can Tho.

vietnams exports to eu reached us 378 billion since enforcement of evfta
A month since the EVFTA took effect, phones and accessories are the largest groups in Vietnam's exports to the EU. Photo: Vietnamplus

In addition, cell phones and components are the largest groups in Vietnam's exports to the EU and the bloc is also the largest export market for this key sector from Vietnam. In August, the export turnover of phones and components to Europe reached more than US$1 billion, thereby increasing total turnover in the first eight months to US$6.96 billion. Although it decreased by 17.2% over the same period in 2019, it still accounted for 22% of Vietnam’s total export turnover of phones and components.

In addition, the EU is also the leading export market for Vietnam's important commodity groups, such as computers, electronic products and components; textiles; agricultural products; and footwear, with turnover worth billions of USD in each group.

In the opposite direction, by the end of August, Vietnam’s total import turnover from the EU had reached US$9.82 billion. In August alone, the figure reached nearly US$1.4 billion, US$200 million higher than the average for the first seven months of the year.

EVFTA brings new impetus for Vietnam’s fishery exports

Shipments of Vietnamese fishery products to the EU in August, the first month the EU-Vietnam Free Trade Agreement took effect, increased by around 10 percent over July, demonstrating the positive effect of the deal, Vietnam News Agency reported.

The EU is the third largest market for Vietnam’s fishery products, after the US and Japan, with a market share of 17-18 percent.

Under the EVFTA, among about 220 tax lines of fishery products with rates ranging from 0 to 22 percent, most tax lines in the high range of 6-22 percent have been reduced to 0 percent immediately after the agreement took effect. The remaining tax lines will be phased out to zero after 3-7 years.

vietnams exports to eu reached us 378 billion since enforcement of evfta
Processing Tra fish for export Photo: VNA

Shrimp is a major export that has benefited from the new tariff scheme. Shrimp exports to the EU in August rose by 20 percent from the previous month, and are expected to continue to increase towards the year-end.

Tuna also has good prospects in the EU market. In the first half of August alone, the value of tuna shipments to the EU picked up 11 percent month on month to nearly 6.3 million USD.

Tra fish exporters are pinning hope on the EVFTA, because under the deal, tariffs on many Tra fish products have been reduced to 0. However, export of those products has not recovered so far due to deep reduction in the past eight months.

At the same time, technical requirements, quality standards and origin rules under the EVFTA pose new challenges to the Vietnamese fishery sector.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien said in anticipation of the free trade deal, Vietnamese fishery enterprises have made necessary preparations to meet the requirements of the EVFTA.

He added that Vietnam is also mobilizing the entire political system to address the problem of illegal, unreported and unregulated (IUU) fishing in order to have the EU’s “yellow card” removed.

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Malie Nguyen