Abundant Opportunities for Vietnamese Businesses in EU Market

Vietnam's exports to the European Union (EU) increased 5.9 times from US$4.1 billion in 2000 to US$16.5 billion in 2011, accounting for 20 percent of Vietnam’s total export value. The country’s key exports to the EU include seafood, coffee, apparels, footwear and handicrafts.

 

Particularly in 2011, Vietnam saw a leap in exporting key products to Europe like telephones, garments, footwear, coffee, seafood, pepper, cashew and wooden products. The growth was more than 25 percent over 2010. A reason cited for Vietnamese goods to expand European market shares in the time of economic and financial crisis is attributed to the shift of investors to more reasonably priced goods. In the meantime, Vietnam’s products are affordable for middle-income earners while product quality is quite high.

 

At the conference on “Promoting Vietnam’s exports to European market” held in Ho Chi Minh City, Mr Tran Ngoc Quan, Deputy Director of the European Market Department under the Ministry of Industry and Trade, said: Once goods enter the EU market, they will be freely circulated in all 27 member countries. Each country has its own tastes, consumer styles, language, and business culture; hence, it is a challenge for Vietnamese exporters to create products suitable to each country.

 

He said exporters necessarily understand consumer tastes in each market they make presence to have proper products. They also need to improve product quality to boost sales there.

 

The EU market always has strict technical regulations relating to human health, environment, and sustainable development. The EU still maintains internal production protection policies, trade remedies, and anti-dumping measures. It is applying more quality regulations like the European Community Regulation on Registration, Evaluation and Authorization of Chemicals (REACH), regulation on traceability of goods (TRACY), and regulations against illegal, unregulated and unreported (IUU) fishing.

 

Apart from keeping a close watch on product quality, exporters must also find out the way to distribute their products through effective channels. And, according to Mr Quan, business chain is now a popular form in the EU; thus, Vietnamese companies necessarily penetrate into those distribution chains there to reach consumers more easily. Importantly, businesses should not pursue short-term benefits or commit trade frauds.

 

There is a piece of good news for Vietnamese exporters. In 2011-2013, Vietnam enjoyed the EU’s Generalized System of Preferences (GSP) with a tax rate reduction of 3.5 percent on average compared to GSP rate making up 25 percent of Vietnam’s total export turnover in the EU market. And, the EU plans to adjust GSP regulations in 2013 by minimising GSP for highly competitive countries to create favourable conditions for businesses in developing countries, including Vietnam, to improve their competitiveness in the market.

 

Representatives of some EU countries promised to help Vietnamese exporters, said Ms Bruna Santarelli, Chief Representative of the Italian Trade Commission Office under the Italian Embassy in Vietnam. Italy - the world’s seventh largest exporter and eighth importer- makes up 3.5 percent of global trade. In recent years, Vietnam's exports to Italy are stable but, to boost shipments to this market, the two sides need to enhance information exchange and encourage businesses to promote trading activities further. “The Trade Commission Office has offered many free services to help Vietnamese businesses expand investment and business in the country as well as provide the list of Italian companies - at the request of Vietnamese enterprises and organise business matching,” she added.

 

Mr Jos Schellaar, Dutch Consul General in Ho Chi Minh City, said the Netherlands is considered a gateway to and trade hub of the EU market thanks to its advantages as accounting for 4 percent of total road transport, connecting ports with landlocked industrial complexes, accounting for 57 percent of distribution centres, playing leading roles in logistics and chemical industries in the region, etc.

 

In the coming time, the Ministry of Industry and Trade will support Vietnamese businesses to directly access major European supermarkets and provide EU market information updates on its websites.