Germany - Vietnam's Biggest Trading Partner in EU

 

Trade exchange between Vietnam and Germany has tripled since mid-1996. Vietnamese key items exported to German market include textiles, garments, footwear, coffee, aquatic products, ceramics and handicraft goods as well. Meanwhile, Germany chiefly exports automobile, machinery equipment, chemical substances, drugs, special fibre and garments to Vietnam. Vietnamese exports show increasing credibility and prestige in the German market. Although bilateral trade value with Vietnam only accounts for a moderate rate, Germany still sees Vietnam as a potential market and an important trading partner in the near future. German consumers' enormous purchase power means that Vietnamese goods enjoy opportunities of tapping into the German market.

 

As for Germany, the EU nation masters state of the art technology with capability of providing commodities at great number while Vietnam is in urgent need of machinery equipment and tools for national industrialisation and modernisation processes. As a result, Vietnam will be still a target market that the German exporters look to in the long term.

 

However, some issues remain in bilateral trade ties between Vietnam and Germany. First, Germany still must comply with common trade practices set out by the EU, therefore Vietnamese goods still suffer from quota system concerning key export items such as garments & textiles; aquatic products (tougher rules about hygiene standard, quality, food security); rice (high tax rate).

 

Additionally, competition in the German market in particular and in EU market in general has become fiercer while Vietnamese enterprises show their inexperience and lack of professionalism in market research and business practice. These factors bar Vietnamese companies from entering the German market. Regardless of above-mentioned difficulties, trade relations between Vietnam and Germany are expected to go smoothly in the forthcoming time based on the recovery of two economies.

 

Vietnamese key exports to Germany (unit: million Euro)

exported products	1999	2000	2001	2002	2003	2004
processed food	199	199.7	123.5	93.6	117.6	165.9
sea products Coffee	12 89	16 77.9	21.9 75	11.6 60.4	13.8 79.3	24.4 109.1
materials	16	24	30.4	22.9	30.7	34.1
finished products	809	1030.3	1050.7	1047.6	1021.2	1138.4
garments footwear leather items electronics goods	383 154 53 14	336.6 213.1 64.7 16.7	314.6 189.1 65.8 1	281.6 490.5 48.2 1.1	213.3 540.6 35.8 0.8	149.1 578.5 35.9 0.8

(Source: German statistics Bureau)

(Vietnamese key imports from Germany) (unit: million Euro)

imported items	1999	2000	2001	2002	2003	2004
processed food	9	11	7.4	6.7	10	13.6
half-processed food	36	50.5	51.2	66.4	68.2	93.2
finished products	184	200.7	351.9	442	501.7	656.4
machinery equipments electronics goods pharmaceutical items chemical products automobile	78 36 8 14 5	66 36.3 10.9 13.6 8	132.2 5.8 12.1 14.1 8.9	144.2 1.9 13.3 17.4 12.6	186.9 4.2 14.4 17.1 15.4	153.6 4.8 16.4 16.8 26

The Truong Sinh specialises in producing fruit and egg wine. Our products are available in supermarket chains nationwide and have been highly appreciated by consumers. Our production line was imported from Germany and we have received technology from Germany experts. Having co-operated with German enterprises, I have not had any complaints about them. German companies have modern technologies, serious business attitude, and effective management methods.

Our visit and market exploration trip to Germany in September, 2005, aimed to learn more about German technologies and seek German partners for technology transfer, so as to expand our business scope to safe food and cooking oil processing. We have found suitable partners and will sign contracts very soon. In general, Germany is of great potential for Vietnamese enterprises not only in exporting their products but also in transferring technologies and management skills.

 

As an enterprise specialising in making handicrafts from sedge, the Anh Hong Company has 20-year experience in producing and exporting handicrafts. Our annual revenues are put at between VND 15 billion and 20 billion. We employ 3,000 workers from households. Our traditional markets include Japan, European countries, including Germany. We have exported our products to Germany for more than ten years.

Germany is a familiar and potential market for Vietnamese handicrafts. Relations with German enterprises are established on a basis of equality and mutual benefit. I think that with good trade promotion activities between Vietnamese and German enterprises, it will create a good opportunity for Vietnamese enterprises to promote their export to Germany. At the same time, they will be able to expand their activities to other EU member countries. Vietnamese enterprises should take the opportunity to introduce their products and prepare goods for contracts on export to Germany if they reach any agreement with German partners during the special event.

 

The Truong Thanh Casting Company specialises in exporting mechanic products to Germany. Over the past ten years, we have co-operated with the Landmann-PeiGa Company of Germany and have won much trust from it. Our export revenues to Germany in 2003 were put at around US$5 million. Each year, Landmann- PeiGa pays us US$300,000 in advance to support our production.

I think that many unexpected incidents emerge in economic activities, but all relevant sides will be able settle the incidents by sharing efforts to discuss solutions and experience, so as to maintain their ties. In particular, German partners attach importance to prestige and create favourable conditions for partners. These are the quality Vietnamese entrepreneurs should learn from their German partners. Also, Vietnamese enterprises should pay attention to meeting requirements on quality, delivery schedule from their partners, when exporting products to Germany.

 

As a professional consumer goods retailer, we have been aware of the slim hope for providing German consumer goods in Vietnam. This is because in recent years, Vietnamese consumer goods, especially food and foodstuff, have made significant progress in terms of quality and prices.

I think only German cosmetic products can be sold well in Vietnam. We have planned to import products of this kind from Germany. This is why we are attending the Vietnamese Days in Germany. We want to seek co-operation opportunities with investors of financial strength and experience in supermarket business development and management.