The EVFTA Agreement has been put into effect for more than 2 years, creating a huge boost for Vietnam's exports to the market of 27 EU member countries.

After more than 2 years of the Vietnam - European Union Trade Agreement (EVFTA) coming into effect (August 2020), the bilateral economic and trade relations between Vietnam and the EU have achieved impressive results.

EVFTA is also considered as a free trade agreement with the fastest implementation among recent new generation FTAs.

According to the General Department of Customs, in the second year of implementing the EVFTA Agreement (from August 2021 to July 2022), the total import-export turnover between Vietnam and the EU reached USD 61.4 billion, an increase of 11.9%. compared with the first year of entry into force of the Agreement; in which export value reached USD 45 billion, an increase of 17% and import value reached USD 16.4 billion, an increase of 0.2%.

In the first eight months of 2022, two-way trade turnover between Vietnam and the EU reached USD 42.4 billion, an increase of 14.85% compared to the first eight months of 2021. In which, Vietnam's exports to the EU reached USD 32 billion, an increase of 24 %; trade surplus to the EU reached USD 21.6 billion, an increase of 46.4% over the same period last year.

The structure of goods exported to the EU also tends to diversify when not only key commodities have achieved impressive growth rates such as machinery and equipment (34.8%), textiles (41.2%), footwear (36.2%) but the export turnover of many agricultural, forestry and fishery products is also increasing at a very high rate, such as: coffee (54.4%), seafood (41.9%), vegetables (18%), pepper (25%), rice (22.2%).

Vietnam also increased imports of many products from the EU, typically: pharmaceuticals (7.6%), chemicals (102%), timber and wood products, animal feed (15.5%), milk and dairy products (29.1%), other food preparations (45.3%) and input materials for production.

In the upcoming period, when the EU-Vietnam Investment Protection Agreement (EVIPA) comes into effect, will help open up many favorable conditions in attracting investment capital, technology transfer, and support projects from EU partners to promote green and sustainable economic structure, high-tech transformation in production, helping Vietnamese goods meet EU technical and environmental standards, participate more deeply in the supply chain with the EU.

An important indicator in FTA implementation is taking advantage of tariff preferences, EVFTA is also an agreement that businesses understand and make good use of.

Specifically, over the six months of 2022, the amount of goods applying for EUR.1 certificate of origin is about USD 5.8 billion, equivalent to about 25% of export turnover to the EU in this period. The figure of 25% does not include the amount of export goods eligible for GSP incentives.

The EU is a large market, importing USD 2.5 trillion of goods every year, although Vietnam has accelerated its exports to the EU, it only accounts for less than 2% of the market share in this market. Goods are exported mainly to Germany, France, Italy, and the Netherlands.

The EU is a market with high standards for imported goods, which requires Vietnamese manufacturers to adapt if they want to increase exports in a sustainable manner.

Kylie Nguyen