According to the Multilateral Policy Department, Vietnam's vegetables and fruits exports to the European Union (EU) only make up 2.7% of the market share, while seafood accounts for 4.2%. This indicates that there is still a lot of room for Vietnamese agricultural products to enter the EU.
The Ministry of Industry and Trade reported that after implementing the Vietnam-EU Free Trade Agreement (EVFTA) for over two years, bilateral import and export between Vietnam and the EU have seen impressive growth.
In the first year of EVFTA implementation, bilateral trade reached $54.9 billion, an increase of 12% from the previous year, with exports at $34.5 billion, an 11% increase. The second year saw trade reach $61.4 billion, a nearly 12% increase, with exports at $45 billion, a 17% increase.
In the first 11 months of 2022, import and export turnover reached $57 billion, a 14% increase from the same period the previous year, with exports at $43.5 billion, a 21% increase. Many key Vietnamese export products saw high growth rates, such as textiles and garments at 24%, footwear at 19%, and seafood at 41%.
However, the Ministry of Industry and Trade believes that there is still a lot of potential and opportunity in the EU market for Vietnamese businesses, who still face many difficulties in accessing this market for both subjective and objective reasons.
Vietnam's brand is not well known in European countries and the value and benefits that Vietnamese businesses receive do not match their potential.
The Deputy Director of the Multilateral Trade Policy Department, Mr. Ngo Chung Khanh, said that Vietnam has seven key export groups to the EU: computers, textiles, machinery and equipment, footwear, fresh and processed vegetables, aquatic products, and rice.
Mr. Ngo Chung Khanh added that the EVFTA has reduced the tax rate on fresh and processed vegetables from 20% to 0%, but Vietnamese fresh and processed vegetables currently only make up 2.7% of the market share in the EU. Therefore, there is huge potential for Vietnamese enterprises to export fresh fruits and vegetables and processed vegetables to the EU.
Source: VietnamBiz
Similarly, the tax rate for aquatic products without the EVFTA would be 20%, but with the EVFTA, the tax has been eliminated for 86.5% of Vietnam's export turnover in three years and will be eliminated for 90.3% of turnover in five years and 100% in seven years. However, Vietnam's seafood exports to the EU only make up 4.2% of the market share, so there is still room for Vietnam to export this product to the EU.
From a business perspective, Mr. Nguyen Van Hieu, the Director of Export Sales at Loc Troi Group, said that thanks to the EVFTA, Loc Troi's rice exports to the EU have grown significantly, from 2,000 tons per year in 2018 to 24,000 tons in the first 11 months of 2022. Mr.
Nguyen Van Hieu emphasized that to increase sustainability when exporting to this market, enterprises need to focus on product quality, particularly controlling pesticide residues in products.
(Business and Trade)
Read more: Agricultural Products Industry Report
Vietnam Macro and Industry Report - December 2022
Seafood Industry Report - December 2022