After more than 2 years of implementing the EVFTA, Vietnam's exports to the EU have recorded positive results. However, the context of inflation and difficulties of the world economic situation, especially changes from the EU market, are expected to affect Vietnam's exports in the coming time. Enterprises need to prepare a methodical plan to take full advantage of market opportunities and great advantages from this Agreement.
The trend of expanding and diversifying export products
According to Ms. Nguyen Thao Hien - Deputy Director of the European - American Market Department, Ministry of Industry and Trade, after more than 2 years of implementing the European-Vietnam Free Trade Agreement (EVFTA), Vietnam's exports South to EU has recorded positive results. Accordingly, in 2021 and the first months of 2022, the two-way trade between Vietnam and the EU will continue to recover and grow very strongly, even compared to the pre-pandemic period. The EVFTA Agreement has actively supported Vietnamese and EU goods to access each other's markets, meeting the needs of supply diversification of both sides.
Data from the General Department of Customs shows that, in the 10 months of 2022, the import and export turnover of goods between Vietnam and the EU reached 52.5 billion USD, up 14% over the same period last year; in which exports reached 39.7 billion USD, up 23.5%. The EU is currently Vietnam's leading trading partner and the third largest export market with an average export growth rate of 7.5%, accounting for an average share of 13.6% of the country's total exports (2015 - 2021).
Along with that, Vietnam's exports to most markets in the EU recorded good growth and witnessed a positive shift. Notably, the structure of exports to the EU also tends to expand and diversify. The implementation of the EVFTA Agreement also contributes significantly to helping Vietnamese goods improve their competitiveness and expand their market share in the EU market.
According to calculations from Eurostat data, Vietnam's market share in total EU imports from the EU market in the first eight months of 2022 accounted for 1.8%, higher than ASEAN countries such as Malaysia, which accounted for 1.2%, and Thailand. Lan accounted for 0.9%, Indonesia accounted for 0.7%, Singapore accounted for 0.7%. Obviously, these are very positive results and a favorable start for the economic and trade development between Vietnam and the EU in the coming time.
Deputy Director General of the European - American Market Department Nguyen Thao Hien said that in the context of the international situation, it is forecasted that there are still complicated and unpredictable developments, especially the regional and global geopolitical instability, potential hidden many risks of economic recession, supply chain disruption. Export activities from Vietnam to the EU market area are also facing many challenges due to the inflation situation that causes consumption demand to decline, the price of input materials to increase, transportation costs to increase. up. In particular, the EU trend has increased the application of non-tariff barriers, tightened regulations and technical standards on environment/climate, and sustainable development.
Currently, with the advantage of the EVFTA, many Vietnamese export products are still facing difficulties in accessing the EU market because they have not completely met the EU's high requirements set out from regulations, technical standards, traceability, to environmental and social issues, sustainable development…. The EU also regularly reviews and adjusts regulations, making it difficult for Vietnamese businesses in many cases to grasp and adapt. According to preliminary statistics from the Vietnam SPS Office, 2 years after the EVFTA came into effect (August 2020 - August 2022), the EU has published about 71 drafts and adjusted about 146 related regulations to Vietnamese exports.
Notably, the EU is tending to strengthen standardization, legalize regulations, tighten technical standards related to climate/environment, sustainable development, green transition. A series of new regulatory proposals have been announced recently by the European Commission, such as the Border Carbon Regulatory Mechanism (CBAM), the Deforestation Prevention Bill COM(2021)706, or package of regulations on sustainable, circular products… The implementation of the above regulations is likely to have a significant impact on the export of goods, increasing technical and administrative barriers to both aspects agricultural to industrial goods.
Innovating technology, increasing the link chain
In order to take advantage of opportunities and increase exports, Ms. Nguyen Thao Hien said that Vietnamese businesses need to make efforts to innovate themselves, prepare a methodical plan to make the most of market opportunities and great advantages from EVFTA.
To develop market share in the EU market, businesses need to have a long-term vision and business strategy for each specific product and each target market. Enterprises should promote market diversification, increase products in niche markets, have competitive advantages; access to new markets through supermarket chains and retail stores in different target countries in Europe; at the same time, select market segments and distribution channels suitable to the product and size of the business.
In production, in addition to actively controlling and improving product quality, ensuring strict compliance with EU import standards and regulations, enterprises need to pay special attention to traceability, meeting the origin to enjoy incentives from EVFTA. At the same time, promote the application of science - technology, good practice standards in production, enhance deep processing to increase product value and competitiveness. Domestic enterprises should also strengthen cooperation, link chains, build concentrated raw material areas to improve productivity and product quality; focus on building and developing the brand.
Besides, it is possible to find foreign investment partners to take advantage of technology, capital as well as experience of developed countries.
Deputy Director General Nguyen Thao Hien also noted that, at present, the increase of green standards and sustainable development is an inevitable trend globally, not only in the EU market. Efforts to greenen production, as well as implement social responsibilities, and protect the environment need to be focused and further promoted. Accordingly, innovating technology, investing in modern machinery, and waste treatment systems according to international standards, aiming at green, clean, and environmentally friendly production criteria and ensuring conditions for workers is a necessary group of solutions.