Official channels: People relax at a cafe in Hanoi. Vietnam’s EU export turnover grew by approximately 16.8%, while imports rose by around 10%, making the economic block among the country’s six largest import and export markets. — AFP
HANOI: Since the EU-Vietnam Free Trade Agreement (EVFTA) came into effect in August 2020, the the continental block has emerged as a leading trade partner for the South-East Asian nation.
And Vietnamese businesses could unlock even more opportunities from the EVFTA if they know how to capitalise on the benefits in trading with the European Union (EU).
This was the narrative at a seminar on promoting trade in Europe, focusing on the potential for expanding exports to the EU via channels of the Vietnam Trade Promotion Agency under the Industry and Trade Ministry (MoIT).
Speaking at the event, Dinh Sy Minh Lang, an official from the MoIT’s European-American Market Department, said that data from Vietnam Customs indicated that in the past four years, the country’s exports to the EU were estimated to exceed US$200bil, with an annual growth of 12% to 15%.
In July 2024 alone, Vietnam recorded a trade surplus of over US$20.2bil with the EU, a 19.4% increase compared to the same period in 2023.
Its export turnover grew by approximately 16.8%, while imports rose by around 10%. The EU is now among Vietnam’s six largest import and export markets.
A survey by the European Chamber of Commerce in Vietnam showed that the EVFTA had significantly boosted Vietnam’s exports to the EU, from €35bil in 2019 to over €48bil in 2023.
Sectors such as electronics, textiles, footwear, agriculture and seafood had particularly benefitted from the phased tariff reductions under the agreement.
Lang said that formal export methods were more complex due to stricter documentation and higher taxes and fees, but ensured rigorous quality control.
This approach enhanced the reputation of Vietnamese companies and products in global markets.
Participation in official channels also allowed businesses to access markets, particularly demanding markets and benefit from state support policies, thereby contributing to sustainable economic growth, he added.
To succeed in exports via official channels, businesses needed to identify target markets, research standards and regulations and assess their own capabilities to develop effective strategies, he said.
Moreover, they should adopt suitable standards for their products, build and maintain quality management systems, enhance employee skills, upgrade technology, and focus on producing high-quality goods that satisfy stringent export market demands.
According to former trade envoy at the Vietnamese Embassy in the United Kingdom, Nguyen Canh Cuong, British consumers prioritise quality, sustainability and unique value propositions.
They are willing to pay a premium for products that meet high quality standards and demonstrate a commitment to environmental protection, he said of the nation that has one of the world’s largest economies, with a population of over 67 million.
The UK market is governed by stringent technical standards and regulations, particularly in food safety and environmental practices, he added.
And to succeed in this highly competitive landscape, businesses must be thoroughly prepared to meet these requirements and differentiate themselves effectively.
Cuong highlighted the opportunities provided by the UK-Vietnam Free Trade Agreement, which is to eliminate over 99% of tariff lines within six years.
Key beneficiaries include seafood, textiles, footwear, furniture and processed agricultural products.
Catfish and frozen shrimp, for example, are expected to achieve an export turnover of over US$30mil in 2024, an increase of more than 10% year-on-year.
Products made from natural and sustainable fibres are attracting British consumers. This is Vietnam’s second largest import market in Europe, with a high demand for modern furniture.
He suggested using digital marketing and artificial intelligence for entry into the UK market, as well as participating in international trade fairs and collaborating with trade support organisations.
The British Standards Institution (BSI) plays a crucial role in ensuring that products meet the technical, legal and commercial requirements of the UK market.
Products that adhere to BSI standards are highly regarded for their quality and safety, making them more likely to gain the trust of British importers and consumers.
By meeting these standards, businesses also reduce the risk of their products being rejected at customs for failing to comply with technical or safety regulations.
Moreover, BSI certifications are widely recognised, which can facilitate access not only to the UK market but also to the broader European market.
Cuong also said businesses need to align products with British consumer preferences by using recyclable and biodegradable materials, providing clear information on product composition and origin, and choosing neutral colours for packaging.
Nguyen Thanh Hung, a senior advisor to the government, stressed the importance of minimising risks in cross-border transactions.
Businesses should verify information, proactively validate broker-supplied information through official channels such as industry associations or Vietnamese diplomatic missions in the buyer’s country.
Companies should engage directly with partners to avoid over-reliance on intermediaries, he said, adding that in any transactions, they must draft contracts with clear and comprehensive terms to tightly bind all parties involved.
By adopting these strategies, Vietnamese firms could enhance their competitive edge in the European market, while navigating the complexities of formal export processes, he said. — Viet Nam News/ANN
