EU Remains Vietnam’s Major Export Market

This activity is a part of the “Strengthening capacity of trade policy for Vietnam Business Associations” project and belongs to the framework of the Vietnam - EU Multilateral Trade Assistance Project phase III (MUTRAP III).

 

EU is a potential market for Vietnam enterprises. Therefore, Vietnam enterprises also need to be flexible and diversified in investment promotion activities, so that they can find their markets and new partners. Besides that, they should concentrate and take their export opportunities to potential markets, intensify activities of trade promotion, compete not only on price but also on quality, and improve designs. In addition, the Vietnam Government has been implementing several measures to support small and medium enterprises and export enterprises.

 

According to the Green Book 2011, trade relation between Vietnam and EU has significantly grown in 2010 with total export value of over EUR 9 billion, creating EUR 4.9 billion of trade surplus value for Vietnam. Accordingly, the EU, still considered the second largest foreign market of Vietnam just after the United States, has consumed nearly 20 percent of Vietnams total exported products in 2010, including: footwear (EUR 1.75 billion), seafood (EUR 739.2 million), coffee (EUR 794.2 million), and furniture (EUR 720.5 million).

 

During the first ten months in 2011, exports from Vietnam to the EU have increased, over 30 percent higher than the same period last year. Currently, the EU is recognised as an important market for the footwear, garment, seafood, coffee, and furniture industries. Vietnam and the EU are considering and negotiating the Free Trade Agreement to reach a bilateral agreement between the two parties on expanding export markets for enterprises.

 

In this information festival, Dr Vo Tri Thanh, Deputy Director of Central Institute for Economic Management (CIEM), foresaw a downgrading trend of world economic growth in the 4^th quarter of 2011 and into 2012, and the EU has become a disadvantaged market due to strongly downgraded growth. However, EU market potential is still very large for Vietnam enterprises during the upcoming period.

 

In order to be able to conquer the European market and become its regular partner, according to Mr Albert Franceskinj, executive lawyer of the Fidal Franceskinj Chazard and Partners Law Company, Vietnam must understand that the EU possesses many strict regulations for imported goods to create a healthily competitive environment. In order to create an image and promote Vietnamese products, Vietnam enterprises should not operate separately, they would better gather themselves into groups, sectors, or engage in some industrial and professional associations to be informed about market demands, as well as supported with measurements to find out about partners. Besides that, enterprises should also endeavour to improve production to reach international standards and meet export market requirements, minimising the risk of violations in competition laws and anti-dumping regulations of the host country. Particularly, the implementation of basic regulations such as product transparency, quality and safety must be guaranteed.

 

Experts have also predicted the trend and opportunities for 2012 exports, in spite of the EU crisis and its impact on exports from developing countries, Vietnam still expects stable growth. Mr Sanjay Kalra, chief representative of International Monetary Fund (IMF) in Vietnam, said that despite the difficult economic situation, the EU is regarded as a lifeline for the export markets of other countries and dynamically developing ones with many potential partner enterprises for Europe.

 

According to experts, the inherent weakness of economies in developing countries has shown the importance of transforming the Asian growth model. According to Mr Sanjay Kalra, in the short term Asia should stop tightening monetary policy in several countries, promote necessary policies for re-balancing and maintaining flexible exchange rates. This will help restructuring the economy towards domestic demand, creating more comprehensive development.