Forecasts are confidently predicting the EU market’s promise for Vietnamese goods in 2013 as both sides maintain their traditionally stable relationship and intensify their efforts towards the signing of the Free Trade Agreement (FTA).
Vietnam’s export turnover to the EU market grew by 20 percent in 2012 despite the economic difficulties hampering the European bloc.
According to Ministry of Industry and Trade (MoIT) statistics, 2012’s total export-import turnover between Vietnam and the EU was an estimated US$28.3 billion, up 16.5 percent on 2011. Vietnam’s exports to the vast market hit US$20 billion, up more than 20 percent, while imports reached US$8.3 billion, up 7.2 percent on the previous year.
Vietnam’s key EU exports include telephones and electronic components, valued in excess of US$5 billion last year and topping the list of commodities with high EU market export turnover.
Vietnamese footwear, garments, and textiles earned approximately US$2.5 billion, while revenue from computers and electronic products was estimated at US$1.3 billion.
Vietnam’s staple EU imports are machinery, spare parts, transport vehicles, and pharmaceuticals.
Both Vietnam and the EU are preparing for FTA negotiations with the aim of creating a favourable trading environment for the former. Most Vietnamese products—agricultural products, food, footwear, and garments and textiles—will be granted a zero percent tax rate.
The negotiations will add fresh impetus to accelerating trade exchange between Vietnam and the EU and open up prospects for Vietnamese businesses to gain access to the EU and attract its investment over the long term. Experts argue the FTA will help Vietnam improve the position of its economy in the global production chain.
Vietnamese-EU bilateral trade ties will still need to overcome the inevitable challenges arising from Europe’s sluggish economic recovery. The MoIT warns Vietnam’s EU market export growth rate is likely to halve to 10 percent in 2013.
Some key Vietnamese export sectors are anticipating to numerous difficulties this year. The Vietnam Textile and Apparel Association (VITAS) says that along with the country’s shrinking exports to other major markets—Russia and the US—its exports to the EU market are also forecast to fall due to lower consumer demand and tougher pricing competition from foreign garment and textile exporters.
The Vietnam Association of Seafood Exporters and Producers (VASEP) has raised concerns about the sector’s ability to increase EU market export turnover in 2013. The association argues the decline in seafood export turnover to the EU market will linger through all four quarters of the year.
Experts suggest many Vietnamese businesses have not completed the required updates to information about their products destined for the EU. The EU market demands high standards and strictly follows its own regulations and those of other international organisations. Businesses need to maximise their adaptability to technical barriers and the EU’s food hygiene and safety criteria and anti-dumping mechanisms.
VOV
