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Vietnam's Import and Export Turnover to the EU Over the Years

USD has now reached 12.27 billion USD (2007), an increase of 2 billion USD compared to 2006 and 4 billion compared to 2005 [6].

Table 3: Vietnam's import and export turnover to the EU over the years

Unit: million USD


Target

2005

2006

2007

Export

5,450

7,100

8,170

Import

2,650

3.120

4,100

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(Source: European Institute )

2.1. Vietnam's exports to the EU

2.1.1. Export turnover

Currently, the EU is one of Vietnam's important trading partners and a major export market for our country. The import and export turnover of Vietnamese goods to the EU market is increasing. This is shown in the table below.

Table 4: Vietnam's export turnover to the EU (2001-2007)


Year

2001

2002

2003

2004

2005

2006

2007

(1) Vietnam's exports to the EU

(Million USD)


3151


3311


3852


4971


5450


7100


8170

(2) Total export turnover of

VN

(Million USD)


15029


16705


19688


26503


32233


39605


48000

Percentage % (1)

in (2)

20.0

18.9

19.1

18.8

16.9

17.9

17.1

( Source: General Statistics Office)

With 8.17 billion USD, the EU became Vietnam's second largest export market in 2007, second only to the US (10.3 billion USD), surpassing Japan (5.7 billion USD), ASEAN countries (8 billion USD) and 2.7 times more than China (3.2 billion USD) [6].

The growth rate of Vietnam's exports to the EU is also reflected in the proportion of Vietnam's export turnover to the EU in total.

Vietnam's export turnover has been increasing and quite stable. In 2000, the EU became the leading export destination for Vietnam and has maintained this position until now. Starting from 2002, exports to the US increased dramatically thanks to the Vietnam-US Trade Agreement. The EU market has decreased in proportion, but still remains one of Vietnam's leading export markets [6].

2.1.2. Export structure

Vietnam's exports to the EU market focus on a number of key items such as footwear, textiles, seafood, agricultural products, wooden furniture, handicrafts, etc.

Footwear: The EU is currently the largest footwear import market of Vietnam. After many years of being second (after the United States), in 2007, the EU surpassed to first place. Vietnam's footwear export turnover to the EU market in 2007 reached 2.1 billion USD, an increase of 8% compared to 2006, accounting for 7.2% of the EU's total footwear import turnover (29 billion USD).

Table 5: Vietnam's footwear export turnover to the EU


Year

2001

2002

2003

2004

2005

2006

2007

Turnover

(Million USD)

1181.5

1363.7

1605.5

1785.4

1810.9

1951.0

2100.0

Growth (%)

11.3

15.4

17.7

11.0

16.0

7.8

8.0

(Source: Vietnam Customs)

Vietnam is the second largest footwear supplier, after China, to the EU market. The main products are sports shoes, accounting for over 40% of Vietnam's footwear exports to this market, fabric shoes accounting for nearly 20%, women's shoes accounting for approximately 15%, sandals about 17% and leather shoes accounting for more than 1.5% [6].

The quantity of footwear imported from Vietnam by each country in the EU varies over the years, but in general, the largest footwear import markets of Vietnam in the EU are the UK, Germany, Belgium, the Netherlands, France, and Italy [4].

However, exporting this product to the EU still has many limitations such as input materials still have to be mainly imported from abroad, consumption still depends heavily on joint venture partners, market research, design and development of new products are still weak.

Textiles : is the second largest export value item of Vietnam to the EU. The EU market is truly open to Vietnam's textile industry when the legal framework for the market has been fully opened and moreover, the EU also gives Vietnam the GSP general tariff preference mechanism.

Table 6: Vietnam's textile and garment export turnover to the EU market


Year

2003

2004

2005

2006

2007

Estimated 2008

Turnover

(Million USD)

612

684

800

1243

1500

1650

Growth (%)

-

11.76

66.25

12.78

12.00

13.80

(Source: General Department of Vietnam Customs)

In 2007, Vietnam's textile and garment exports to the EU reached 1.5 billion USD, accounting for 9% of export turnover to this region and increasing by 12% compared to 2006. In 2008, it is estimated that the textile and garment industry will reach about 1.65 billion USD, increasing by 13.8% compared to 2007 [20].

Although the textile industry has an impressive overall development, its development is still limited. Part of the reason is that textile enterprises mainly do outsourcing for other countries and cannot produce goods for direct export due to the unavailability of input materials. On the other hand, textiles also face fierce competition from other countries such as China, India, etc. These difficulties have greatly limited the development of Vietnam's textile industry.

Seafood products : The EU is the third largest customer of Vietnamese seafood products. The main seafood export items include shrimp, frozen squid, tra fish, basa fish... In 2007, Vietnam's seafood exports to the EU market reached 920 million USD, an increase of 27% compared to 2006, ranking second after the United States (1.1 billion USD) and surpassing Japan (700 million USD) [4].


Chart 1: Vietnam's main seafood export products and markets


In the first three months of 2008, Vietnam's seafood exports to the EU reached 66.7 thousand tons, with a turnover of 210.3 million USD, an increase of 23.3% in volume and 20.5% in turnover compared to the same period in 2007, accounting for about 26% of Vietnam's seafood export turnover.

One of the major problems of the seafood industry is product safety, especially regarding antibiotics and other chemicals found in exported products. This problem has limited or even prevented Vietnamese seafood products from entering the EU market. In addition, the new EU regulations on origin, which came into effect in 2005, require the industry to make major changes and invest more in purchasing, intermediary and processing systems. In addition, anti-dumping lawsuits are also risks that the Vietnamese seafood export industry needs to pay special attention to.

Agricultural products: Vietnam's agricultural products are currently being exported to the EU in increasing value, with the highest being coffee and tea...

For coffee, the EU is the largest import market for Vietnamese coffee. In 2007, Vietnam's coffee export turnover to the EU reached 879 million USD, accounting for 40-50% of Vietnam's coffee export turnover. Compared to the EU's import market share of this item, Vietnam's coffee import turnover only accounts for 4-5% of the EU's annual coffee import turnover.

Regarding tea, tea exports continue to grow quite steadily in volume. In recent years, Vietnam has not exported much tea to the EU, only a few million USD per year. Meanwhile, the EU has to import almost 100% of its drinking tea, with a volume of up to 450,000-470,000 tons/year.

Despite enjoying low tax rates, Vietnam’s agricultural products exported to the EU have not yet reflected their true potential. Part of the reason is that our agricultural products exported to the EU are often in raw form, have no brand name, the production, processing and consumption of agricultural products are not diverse, not specialized, and the understanding of consumer tastes is still weak. The designs and packaging of Vietnam’s agricultural products are still simple and monotonous.

Wooden furniture : Vietnamese wooden furniture exported to the EU currently enjoys GSP tax with a tax rate of mainly 0% (some product codes are subject to 2.1% tax), which has given Vietnam a certain advantage when entering the EU market compared to China, Indonesia, Brazil, Malaysia... because these countries do not enjoy GSP. Vietnam's wooden furniture export turnover to the EU in recent times has had an average growth rate of 38%/year, focusing on wooden furniture and outdoor furniture. In 2007, EU wooden furniture reached about 2.37 billion USD.

Chart 2: Vietnam's wood export turnover to the EU market

Unit: Million USD


1930

1592

1094

672

246

335

435

2370


2500


2000


1500


1000


500


0

2000 2001 2002 2003 2004 2005 2006 2007


(Source: General Department of Vietnam Customs)

According to statistics from the Import-Export Department of the Ministry of Trade in 2007, Vietnamese wooden furniture has penetrated most EU countries, of which the main importing countries are the UK accounting for 24.8%, France (29.1%), Germany (6.8%), Italy (12.6%), the Netherlands (9.0%), and Belgium (7.2%).

However, compared to the total import and consumption of the EU, Vietnam's export level is still modest. One of the reasons is that Vietnamese wooden furniture has to compete fiercely with goods from China, Indonesia, the Philippines and Eastern Europe... On the other hand, Vietnamese wooden furniture still has some disadvantages such as small and fragmented production facilities, lack of investment in design and quality, poor trade promotion and market research, lack of efficiency, unsynchronized supply of raw materials and distribution, more or less still in its infancy... [4].

Handicrafts: This is a potential export item of Vietnam to the EU. Wooden handicrafts, ceramics, rattan and bamboo products are considered the main strengths.

Chart 3: Export turnover of handicrafts to the EU

Unit: Million USD



300

250

200

150

100

50

0


111


120


142


193


225


254

298

2001 2002 2003 2004 2005 2006 2007

(Source: General Department of Vietnam Customs)

According to the assessment of the majority of Vietnamese enterprises exporting to the EU market, the UK, Germany, Italy, and Spain are countries with great demand for rattan, bamboo, and lacquer products; the UK, France, Spain, the Netherlands, and Sweden have great demand for ceramic products; France and Belgium have demand for jewelry [19].

Although the turnover has increased, the proportion of Vietnam's total export turnover to the EU is very low (only about 3%). The reason is that we have to face fierce competition from China, Thailand and many other Southeast Asian countries, while Vietnamese enterprises when exporting to the EU have completely lost their competitive advantage in terms of price. This is due to the fact that goods are packaged bulkily and have to pay a large additional transportation fee, contributing to increasing product costs. In addition, Vietnamese handicraft products in the EU market are generally of poor quality, lack of diversity in designs, and are difficult to withstand harsh weather, leading to product deformation and damage [6].

Plastic, electronic-computer, rubber products : These are new and promising export items. Of these, electronic-computer products have the potential to become a new key export item with high added value of Vietnam. In 2007, plastic and rubber products increased by 59% and 50%, with turnover reaching over 164.3 million tons and 233.2 million USD; electronic-computer products continued to grow strongly, reaching 40% with turnover of 385.2 million USD.

2.1.3. Export market

Among EU member countries, Germany and the UK are Vietnam's largest export markets with an average growth rate of 20-30%/year. In 2006, Germany imported 1.3 billion USD from Vietnam, the UK imported 1.1 billion USD. Next are France and the Netherlands, importing 700-800 million USD, with an average growth rate of 19-27%/year. Sweden, Austria, Ireland and Portugal are smaller markets, with lower import turnover from Vietnam. Spain and Greece are new but promising markets with relatively high annual growth rates [4].

Thus, the scale and growth rate of Vietnam's exports to the EU have been expanded and grown at a fairly good level, the structure of exported goods has changed positively towards gradually increasing the proportion of processed and manufactured goods, goods with high intellectual content, and gradually reducing the export of raw goods. In many products, Vietnam has a certain position in the EU market. However, besides the achievements, there are still some shortcomings such as Vietnamese goods exported to the EU growing rapidly but not stable, easily affected by external environmental impacts such as competition, price fluctuations in the world market, the appearance of barriers; the competitiveness of Vietnamese goods is not high, designs and quality are still poor; trade promotion activities also have many limitations [4].

2.2. Vietnam's imports from the EU

2.2.1. Import turnover

According to data from the European Research Institute, Vietnam's imports from the EU market in 2007 reached over 4.1 billion USD, an increase of nearly 1 billion USD compared to 2006 (3.12 billion USD) and far exceeding 2005 (2.65 billion USD). Import turnover from the EU in 2007 to Vietnam accounted for only 6.8% of the country's total import turnover of 60.8 billion and was 33% lower than this rate in 2006 (7%).

% of ASEAN bloc 12 billion USD.

2.2.2. Import structure

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