|Illustrative photo (Source: VOV)
Vietnam Economic Times quoted comments by Nguyen Son Tra, an official from the Multilateral Trade Policy Department under the Ministry of Industry and Trade, as saying that the EVFTA is expected to yield an additional boost to Vietnamese exports to the trading bloc. Up to 85.6 per cent of total tariff lines are to be eliminated immediately after the trade deal comes into force.
A seven-year tariff elimination roadmap has been set out with 99.2 per cent of tariff lines to be slashed to 0 per cent, representing 99.7 per cent of the country’s total turnover of exports to EU markets.
Of note, Germany has emerged as a key EU importer of Vietnamese goods. 2017 saw Germany along the Netherlands and the UK as the top three EU importers of Vietnamese commodities.
The General Department of Vietnam Customs reported that bilateral trade between Vietnam and Germany reached US$9.5 billion in 2017; of which US$6.3 billion were contributed by Vietnamese exports.
The export figure increased to US$6.86 billion last year. It stood at US$3.3 billion during the first half of this year. Footwear, garments and textiles, coffee, aquatic products, cashew nuts, and pepper topped the list of domestic goods shipped to Germany.
In deed, there remains plenty of room to boost exports to Germany. Statistics show that the EU member country now ranks second among worldwide furniture importers. Last year it accounted for 8.1 per cent of the global import of such category.
Though local furniture firms have penetrated into the German market, their exports to this market remain modest. Vietnamese furniture exports to Germany reached only US$80.8 million during the first quarter of this year.
Statistics released by the Vietnam Trade Office in Germany indicate that the European country is the world’s second largest importer of unmilled pepper (code: HS 090411), with a proportion of 10.1 per cent of the global turnover of such goods in 2017.
Vietnam is the second largest pepper provider for Germany, behind only Brazil. An average of 5,000 tons of Vietnam’s unmilled pepper is estimated to be shipped annually to the German market. Notably, the Southeast Asian country sold 8,510 tons of unmilled pepper to Germany last year and subsequently earned US$35.11 million, up 5.61 per cent in volume, yet down sharply by 34.45 per cent in value.
Marko Walde, chief representative of German Industry and Commerce Vietnam (GIC/AHK Vietnam), has high hopes on imminent opportunities for both countries’ businesses. Germany enterprises expect Vietnamese firms to get more involved in the projects which the former have been implementing in Vietnam.
There are some 300 German firms operating in the Vietnamese market. In a medium and long term, there would be an increase in the number of German investors seeking investment opportunities in the Vietnamese market, partly thanks to the upcoming implementation of the EVFTA and the EU-Vietnam Investment Protection Agreement (EVIPA) which were signed by both sides in late June this year.
Up to 55 per cent of the German enterprises operating in Vietnam have planned to increase their business and investment in the country, noted Walde.
German investors flocked to make bold investments in China 20 years ago, but many are now seeking to move their production bases to another country due to adverse market developments seen in China.
As such, Vietnam and Thailand are regarded as the most promising investment destinations in Southeast Asia. In order to attract these foreign investment inflows, Vietnam should perfect its legal frameworks soon in order to build more trust among foreign investors.