Experts from the European Market Bureau say that the MoIT is increasing trade promotions and stepping up the dissemination of new EU regulations to help businesses overcome this difficult period. 

Dang Hoang Hai, head of the bureau, says that the EU is a huge potential market for Vietnam as it makes up 74 percent of the country’s exports. However, Vietnamese businesses encounter numerous difficulties when penetrating this lucrative market due to its trade barriers.

The global economic recession saw two-way trade between Vietnam and the EU last year fall by 6.67 percent to US$15.2 billion. Of the total value, Vietnamese exports dropped by 13.57 percent to US$9.38 billion.

Its major exports were burdened with an average anti-dumping tax rate of 10 percent, and they did not enjoy the generalised system of preferences (GPS). Leather shoes and coffee saw a decline of 22 percent and 18 percent in export value respectively. Other staples, which have secured high growth in the EU market, such as natural rubber, plastics, computers, electronics products, stationery, toys, coal, pepper and cashew nuts, fell sharply by between 20-30 percent.

Vietnam’s exports to the EU in 2010 see no new improvements, as both parties have not yet reached an agreement on GSP, according to trade experts.

They say that the EU economy is still struggling to recover from the global crisis, resulting in an increase in protectionism. Several of Vietnam’s major exports including leather shoes and bicycles will continue to suffer high anti-dumping tariffs in the EU market.

In addition, they say, the EU is setting up technical barriers this year by introducing the law on Registration, Evaluation, Authorisation and Restriction of Chemical substances (REACH), regulations on Illegal, unreported and unregulated (IUU) fishing, and the Forest Law Enforcement, Governance and Trade (FLEGT) programme. These are protective barriers that not all businesses can break through, say experts. 

To iron out these snags, a MoIT-built export support centre in the EU will act as an industrial zone and a bonded warehouse. Commodities will be exported directly to the centre, where they will be processed and packaged before being distributed throughout this huge market.