08:56 | 25/08/2017 Trade
(VEN) - Vietnamese exports to the EU grew 12.6 percent in the first half of this year compared with the same period in 2016, maintaining the EU’s position as Vietnam’s second largest export market, after the US. This is an encouraging result in the context of numerous difficulties facing the EU economy. Vietnam can seek further opportunities to promote exports to the EU towards year’s end.
|Exports of Vietnamese electronic products, machinery and equipment to the EU increased strongly in the first half of this year|
From telephones to shrimp
According to the Ministry of Industry and Trade, Vietnam exported US$18.2 billion worth of goods to the EU in the first six months of this year. This is considered a successful result in light of the fact that the EU economy has not yet recovered fully in terms of consumer spending and given the instability on the continent due to Brexit, the migration crisis, and elections in some countries. Moreover, exports to the EU usually increase towards year’s end, so that the growth in the first half of 2017 compared with the same periods in previous years is considered a welcome sign.
Most exports to the EU grew in the first six months of this year. Electronic products, machinery and equipment continued to contribute significantly to the total export value. Specifically, telephone and component exports were up 12.7 percent; electronic products, computers and components, 25.5 percent; footwear 5.4 percent; textiles and garments, eight percent; timber and wood products, 2.7 percent; seafood exports to the UK grew 25.24 percent; to the Netherlands, 18.36 percent; to Italy, 8.07 percent; and to Denmark, 102.85 percent. Notably, Vietnamese shrimp sell very well in the EU market and enjoy preferential tariff rates under the EU’s Generalized Scheme of Preferences (GSP).
The first half of this year saw increases in Vietnamese exports to most major European markets, such as Germany, up 8.5 percent; the Netherlands, 18 percent; Italy, 9.6 percent; and France, 15 percent.
Tra fish challenge
Despite the opportunities, exports to the EU will face challenges towards year’s end. Specifically, textiles and garments will have to compete with exports from other markets, such as China, India, Bangladesh, Pakistan and Turkey. Vietnamese textiles and garments also have to compete with exports from Cambodia and Myanmar because the EU applies a zero-percent tax rate to textile and garment imports from these countries while Vietnamese products are subject to a tax rate of 9.6 percent.
Contrary to shrimp, tra fish exports to the EU in the first half of this year decreased by 24.8 percent compared with the same period in 2016. Vietnamese frozen tra fish fillets still have to compete fiercely with European white-flesh fish products. Moreover, a news program broadcast by the Spanish TV channel Cuatro this February was defamatory and adversely affected Vietnamese tra fish exports to the EU.
According to the Ministry of Industry and Trade, to promote exports to the EU, domestic seafood businesses should increase investment in processing technology. Tra fish businesses, specifically, need to tighten controls over imported materials to ensure the quality of their products.