Vietnam - EU Trade Forum: Opportunity to expand supply chains with European partners

This is the content presented at the Vietnam - EU Trade Forum by the Ministry of Industry and Trade in coordination with the City People's Committee. Ho Chi Minh organized within the framework of the event series "Connecting the international supply chain of goods" (Viet Nam International Sourcing 2023).

Vietnam ranks 11th among countries supplying goods to the EU

In her opening speech, Ms. Nguyen Thao Hien - Deputy Director of the European - American Market Department (Ministry of Industry and Trade) - said that in recent years, despite instability in the market, supply chain, trade and business, The EU economy faces many difficulties, two-way trade turnover between Vietnam and the EU still records good recovery and growth, with significant support from the Vietnam - EU Free Trade Agreement (EVFTA). ).

Currently, the EU is one of Vietnam's leading trading partners and is the 3rd largest export market and 5th largest import market. On the contrary, Vietnam is standing as a trading partner. 16th of the EU and the EU's largest trading partner in ASEAN. In terms of exports alone, Vietnam ranks 11th among the largest suppliers of goods to the EU.

Statistics from the General Department of Customs show that in 2022, two-way trade turnover between Vietnam and the EU will reach 62.24 billion USD, an increase of 9.2% compared to 2021, and accounting for 8.5%. of the country's total import-export turnover. The trade balance is tilted towards Vietnam.

In 2022, goods exports to most markets in the EU will increase very strongly. Notably, many markets achieved double-digit increases such as Ireland (up 45.9%), Denmark (up 40.0%); Netherlands (up 35.8%); Germany (up 23.1%).

There is still much potential to expand exports to the EU market

The market structure also witnessed a positive shift when not only maintaining and developing exports to large markets, gateways in the Bloc such as the Netherlands, Germany, Belgium, France, but gradually expanding to other markets. smaller, niche markets such as Eastern Europe, Northern Europe, Southern Europe with impressive growth rates (typically Poland, Sweden, Czechia, Slovenia, Ireland, Denmark, Romania...).

According to calculations from data from the General Department of Customs, 2022 will record 9 products reaching a turnover of over 1 billion USD, of which many products have double-digit growth. The product structure is also becoming more and more diverse. Not only focusing on key products such as: Phones of all types & components; computers, electronic products; machinery, equipment and spare parts; Footwear; textiles and garments but also promoting the export of many agricultural, forestry and fishery products to the EU.

Entering 2023, the risk of economic recession, inflation and interest rates remain high, causing a decline in consumption and import demand for goods in the EU, which has a significant impact on trade exchange between Vietnam. with this market area. According to statistics from the General Department of Customs, in the first 8 months of 2023, two-way trade turnover between Vietnam and the EU reached 38.8 billion USD, down 8.6% over the same period in 2022, of which exports to EU reached 29 billion USD, down 9.5% over the same period in 2022. However, the rate of decrease has shown signs of slowing down.

At the same time, inflation levels in the EU continue to be positively adjusted, which will be a factor supporting consumption of goods in the region in the coming time; Imported goods will also gradually improve as inventories decrease and year-end shopping demand increases. Therefore, Vietnam's export of goods to the EU is expected to recover from the fourth quarter of 2023.

In addition, the trend of shifting supply chains and investment flows brings great opportunities for Vietnam to increase competition to attract investment and transfer technology from EU partners deeply involved in the supply chain. sustainable and mutually beneficial with the EU. In particular, with advantages in capital and technology, along with the EU's priorities on "green and digital" transformation, it will support Vietnam in converting to a green, circular production model, giving Vietnamese goods an advantage. in terms of quality, meeting EU regulations and standards and also in line with current sustainable development trends.

What opportunities for businesses?

Mr. Jean Jacques Bouflet - Vice President in charge of Policy of the European Chamber of Commerce in Vietnam (EuroCham) said that Vietnam is emerging as a more important destination in the global supply chain. With the advantage of a strategic geographical location, a stable economy, a young workforce and reasonable policies, these factors converge to turn Vietnam into a leading destination for EU companies. European Union.

“ The Free Trade Agreement between the European Union and Vietnam (EVFTA) along with effective anti-epidemic work, has increased Vietnam's reputation as a reliable destination in the process of shifting supply chains. globally", Mr. Jean Jacques Bouflet emphasized.

Also according to Mr. Jean Jacques Bouflet, since the EVFTA Agreement was signed, companies from the European Union have invested more than 26 billion USD in about 2,250 projects in Vietnam. Among them, Denmark's Lego Group has invested more than 1 billion USD in a green, sustainable and environmentally friendly factory with a scale of 44 hectares in Binh Duong. Or like Germany's Adidas group has cooperated with 51 suppliers in Vietnam. This is a testament to the rapid and profound development in the relationship between EU and Vietnamese businesses, stemming from geopolitical factors and the need to expand markets to Asia.

However, the EuroCham Vice President added that global consumers increasingly prefer environmentally friendly products and companies focus and invest more in green logistics. In that context, Vietnam is facing challenges related to green transformation and sustainable development.

"Vietnam faces a double challenge when it not only has to integrate into these global supply chains but also has to transform its model into a green supply chain," EuroCham Vice President shared.

To solve these difficulties, Mr. Jean Jacques Bouflet said that Vietnamese businesses need to ensure compliance with green standards through the application of more stringent environmental regulations; invest heavily in research, development and infrastructure improvement; Improving logistics capacity - training human resources.

On EuroCham's side, Mr. Jean Jacques Bouflet said, EuroCham is committed to contributing to exploiting the potential of EVFTA by implementing campaigns to raise awareness about the benefits of the agreement. At the same time, organize seminars to help promote direct links between Vietnamese suppliers and consumers from Europe. In particular, focus on capacity building, training to raise awareness of the EVFTA Agreement for members, along with knowledge sharing platforms, ensuring they are equipped to take advantage of the benefits. of this agreement.

In a strategic alliance, EuroCham is working closely with various partners to advance the Sustainable Development Goals (SDGs) in the region. “EuroCham acts as a bridge between the Vietnamese Government and European businesses in open policy dialogues and jointly builds policies that promote the interests of both sides. In particular, promoting digital transformation in implementing administrative procedures plays a very important role, ensuring commercial activities take place effectively and transparently," Mr. Jean Jacques Bouflet emphasized.