The European Union (EU)’s lockdown of its borders to stop the spread of the novel coronavirus (COVID-19) pandemic had not yet had a significant impact on goods circulation, an official from the Ministry of Industry and Trade told Vietnam News Agency.

Shrimp processed for export at Minh Phu Seafood Corporation in Hậu Giang Province.
Firms were urged to watch for developments of the EU's closure of its external borders
to prepare for their export plans. — VNA/VNS Photo Vu Sinh

CNN on March 17 reported that the EU had formally agreed to temporarily close its external borders for 30 days to restrict non-essential travel in an effort to slow the spread of the COVID-19 pandemic.

Ta Hoang Linh, director of the ministry’s European – African Market Department, said that it was too early to say how the EU’s closure of its external borders would affect cross-border trade.

Linh predicted that there would not be any significant impact on goods circulation as the European Commission stressed that goods would not be restricted across external borders.

The biggest impact of the COVID-19 pandemic, according to Linh, was the declining demand as Europeans would stay at home and reduce shopping for products like footwear, clothes and wooden items which are Vietnam’s major export products to the bloc.

Linh stressed that the ministry is keeping a close watch on the development of the EU’s closure of its external borders and the impact on cross-border trade to raise detailed scenarios and measures to limit the negative impact on Vietnam’s exports.

He also urged firms to brace for any possible impact on their import-export activities.

According to statistics of the General Department of Customs, Vietnam’s export revenue to the EU market was estimated at US$5.15 billion in the first two months of this year, representing a drop by 4.56% over the same period last year. Experts said that the decline was, however, just temporary and more time was needed to see the trend.

Vietnam is forecast to have significant opportunities to boost exports into the US$18 trillion EU market when the EU – Vietnam Free Trade Agreement (FTA) comes into force, expected in July.

Research by the Ministry of Planning and Investment pointed out that the trade deal would help increase Vietnam’s export revenue to the EU market by 20% in 2020 and 42.7% in 2025 compared with the scenario of no trade deal.

EU is a major export market of Vietnam with revenue increasing more than 14 times from US$2.8 billion in 2000 to more than US$41.5 billion last year.