EVFTA elevates EU-Vietnam trade relations to new heights

Stefan Stantejsky, Regional Director Asia & Oceania at Austrian Federal Economic Chamber (WKÖ), affirmed the EVFTA has elevated EU-Vietnam trade relations to new heights. He described it as a comprehensive agreement that facilitates market access, making Austrian products more competitive in Vietnam, and vice versa.

According to Austrian statistics, the bilateral trade value reached EUR1.62 billion in 2023, up 36 percent from 2020, when the EVFTA took effect.

Stefan Stantejsky, Regional Director Asia & Oceania at Austrian Federal Economic Chamber (WKÖ)

According to the Austrian official, the EVFTA helps Vietnamese enterprises integrate into Austrian companies’ global supply chains. In addition to eliminating tariffs, the EVFTA offers other benefits, such as the liberalization of services and procurement, the reduction of other non-tariff trade barriers, and the advancement of trade and sustainable development goals.

According to the Vietnamese Embassy in Austria, although it is smaller than other Vietnamese communities in Europe, the 7,000-people Vietnamese community in Austria is active, united, and focused on their homeland. They have been contributing significantly to enhancing mutual understanding and strengthening the ties between the two countries.

Vietnamese products have greatly benefited from the EVFTA, while Vietnam’s main exports to Austria include electronics, footwear, and textiles and garments, Stefan Stantejsky said. Many of these are produced by foreign companies using Vietnam as a manufacturing base, he said. In recent years, Austrian consumers have had a growing demand for produce and seafood, and they have highly rated the quality and flavor of Vietnamese seafood, cashews, coffee, rice, and fruits, Stefan Stantejsky added.

Dinh Thi Hoang Yen, Head of the Vietnam Trade Office in Austria (concurrently Slovenia), said Vietnam has become the 23^rd largest exporter to Austria, selling goods worth EUR1.4 billion to this market in 2023, up 2.5 percent from 2022, and reaching a market share of 0.7 percent (surpassing India). Meanwhile, the country ranks 57th among importers of goods from Austria, with the import value reaching EUR206 million in 2023, 9.1 percent less than 2022, accounting for 0.1 percent of Austria’s total import value.

Austrian businesses have benefited from improved access to the Vietnamese market, especially in sectors such as machinery, pharmaceuticals, and high technology. Vietnam’s exports to Austria continue to grow, contributing to strengthening Vietnam’s economic, trade relations with EU countries.

Vietnam’s major exports to Austria are electronics, footwear, textiles and garments - photo: Can Dung

Further efforts to implement the EVFTA

Alongside the benefits, Stefan Stantejsky said that EVFTA implementation is a continuous process that requires further efforts to bring all its provisions into practice and eliminate barriers for European products to enter the Vietnamese market.

Therefore, multinational companies from Austria are advised to study Vietnam’s network of free trade agreements in order to identify ways to integrate the country in their global supply chain strategy or value chain. The EVFTA plays a major role in this context. Trading and export companies should determine whether the application of the EVFTA is beneficial in the specific context, e.g. if the preferential customs tariffs will be lower than without EVFTA. Furthermore, it is necessary to study the rules of origin and the correct documentation for the proof of origin and application of the Agreement. Austrian exporters, for instance, must use the registered exporter (REX) system in order to make use of the EVFTA benefits.

“As their quality rises, products made in Vietnam should also be branded as such, since consumers in Austria often do not know they buy a product of Vietnamese origin,” Stefan Stantejsky suggested.

Assessing the role of the Vietnam Trade Office in Austria in supporting Vietnamese businesses to increase two-way trade revenue, Stefan Stantejsky said that the Vietnam Trade Office has been a very good job in reaching out to Austrian businesses by briefing them about Vietnam as a good investment destination and introducing them to Vietnamese companies as potential suppliers and business partners. It is crucial to continue to inform companies about the specific benefits they gain from the application of the EVFTA, and instruct companies how to make use of these benefits in practice.

Furthermore, it is important to work on the further implementation of the EVFTA provisions in order to eliminate barriers in the fields of food and beverage, pharmaceuticals and automotive, for instance.

The Vietnamese Embassy in Austria added that after coming into effect, the EVFTA has initially made positive impacts on Vietnam-Austria trade. So far, businesses seem to have exploited quite well the advantages that the agreement brings, especially in tax reduction.

However, to keep promoting trade with the EU and Austria, Vietnamese businesses need to closely follow the market, grasp and exploit the regulations on food safety, labor, anti-commercial fraud, anti-corruption, environmental protection that have been increasingly applied in trade in the EU. This is a factor that demonstrates European values ​​and is also a technical tool to protect the EU consumers, market and institutions. If businesses outside the bloc do not clearly understand will not be able to effectively exploit this agreement.