EVFTA Boosts Demand For Steel, Coffee From Vietnam
Due to the free trade agreement, Vietnam can expect more businesses to come after China and Taiwan implement pretty hefty tariffs for importing into Europe. | Source: Tin Phung for Vietcetera
Tran Thanh Hai, Deputy Director of the Import and Export Department under the Ministry of Industry and Trade, said that the Free Trade Agreement between Vietnam and the 28 member states of the European Union generated a strong boost in the export sector, as reported by the Vietnam Government Portal.
Following the statistics released by the General Department of Customs, the EU-Vietnam Free Trade Agreement (EVFTA) hit a total of $57.01 billion in 2021, a 14.5% increase from the previous year.
Furthermore, there was a 14.2% ($40.1 billion) increase in Vietnam’s export turnover while its import value jumped 15.3% ($16.9 billion). Export turnover means the overall value of final products and output services exported during the given period. As for import value, it is Vietnam’s total spending on the goods and services imported from foreign countries.
In 2021, Vietnam had a whopping $23.23 billion trade surplus with the EU. Having a huge amount of trade surplus indicates economic success. It also creates more free trade opportunities. In contrast, China had the highest trade surplus with approximately $535.37 billion in 2020.
Since the EVFTA deal was signed on June 30, 2019 and took effect on August 1, 2020, Vietnam has gained $83 billion from exporting to the EU, up by 15%.
According to the deputy director, almost all export items that were sent to the EU boomed significantly. In fact, the demand for iron and steel went double, for coffee it surged to 75.2% and peppercorn up 55.8%.
About $5.8 billion-worth goods that Vietnam exported to the EU market were granted the certificate of origin (C/O) form EUR.1 over the first half of 2022, accounting for one fourth of the nation's total exports to the EU.
The EVFTA aims to liberalize tariff and non-tariff barriers for key imports on both sides over ten years. Brussels described the deal as its most ambitious deal with a developing country, a comprehensive and high-quality agreement that ensures balanced benefits for both Vietnam and the European Union.
Due to the free trade agreement, Vietnam can expect more businesses to come after China and Taiwan implement pretty hefty tariffs for importing into Europe.