Vietnam-EU trade exceeds US$30 billion

11:01 | 10/01/2014 Trade

(VEN) - In 2013, although the EU economy was yet to recover, trade between Vietnam and the EU reached over US$30 billion. There are big opportunities for Vietnamese businesses to increase exports because the EU economy is regaining its growth after recession. Vietnam Economic News’ Lan Phuong spoke with Vu Ba Phu, Vietnamese Minister Counselor to Belgium and the EU, about the issue.

What are your views on trade between Vietnam and the EU in 2013?

In 2013 trade between Vietnam and the EU reached over US$30 billion and Vietnam had a trade surplus with the EU. The EU is the largest export market for Vietnam. Major Vietnamese exports to the EU include textiles and garments, leather footwear, seafood, coffee, pepper and cashew nuts.

I must tell you that 2013 was a year full of difficulties for Vietnamese businesses because the EU market was yet to completely recover. However, businesses  tried their utmost to bring their products to this market. The export value of traditional products such as textiles, garments and leather footwear continued to grow. Notably, the export value of mobile phones and electrical appliances sharply increased, by over 50 percent.

In 2013, Vietnam exported to Belgium about US$1.3 billion worth of products, a rise of 18 percent compared with 2012, higher than the growth rate of the country’s total export value. This was an important result. Although Belgium is just a small market with 10 million consumers, there are more than 200 representative offices of international organizations and embassies with over 200,000 foreign diplomats currently working in Belgium. For this reason, many businesses consider Belgium as the gateway to the EU market. If they successfully export some product to Belgium, businesses will be able to successfully export it to the wider EU market. Therefore, successful exports to Belgium in 2013 were a good sign for the Vietnamese economy.

What do you think of the prospects for Vietnam-EU economic cooperation in 2014, based on the results of 2013?

In 2013, EU countries achieved good initial results in an effort to overcome the economic recession, gradually stabilizing and promoting the growth of their economies, generating jobs and reducing unemployment. It is expected that in 2014, the EU economy will regain its growth and the market demand will recover so that Vietnam can increase exports to the EU. To catch new opportunities, I think domestic businesses must enhance their competitiveness in terms of productivity, quality and efficiency rather than competing on price, because the EU market accepts high import prices, but requires imported products to be of stable quality and have good after-sales services.

Belgium is one of the top five countries in the world in terms of preferences offered to foreign investors. Therefore, Vietnamese businesses can invest in opening production facilities in Belgium to utilize these preferences to reduce production costs and improve the quality of products. Moreover, it will be easier for Vietnamese products made in Belgium than those made in Vietnam to penetrate the EU market. If they are made in Belgium, Vietnamese products such as food, seafood and agricultural products will not have to cope with food hygiene and safety barriers.

Vietnamese businesses should increase the export of products such as instant noodles and spices such as oyster sauce, fish sauce and soy-sauce to Belgium because these kinds of products are suitable to the consumer demands there. Vietnamese instant noodle exports to Belgium have increased and are believed to continue to grow in the time to come.

I think Vietnamese businesses should participate in fairs in the EU and Belgium over at least three consecutive years so that consumers in these countries can remember their names as well as the brands of their products.

A free trade agreement (FTA) between Vietnam and the EU will soon be signed. What opportunities and challenges will it bring to businesses of the two sides?

EU businesses expect that the agreement will soon be signed so that they can enjoy preferential tax rates when exporting to Vietnam or importing from Vietnam. On their side, the FTA between Vietnam and the EU will bring Vietnamese businesses opportunities to enjoy lower taxes, increase transparency and cope with fewer barriers. The agreement will also bring Vietnamese consumers opportunities to buy high quality products from the EU at reasonable prices/.