Hanoi (VNA) – The Ho Chi Minh City office of Thailand’s Department of International Trade Promotion (DITP) has encouraged Thai businesses operating in Vietnam to leverage the country as a production base and gateway to the European market, as the EU-Vietnam Free Trade Agreement (EVFTA) enhances the competitiveness of Vietnamese goods.

According to the DITP, the EU has eliminated tariffs on around 99% of tariff lines for Vietnamese exports. This advantage can help goods manufactured in Vietnam improve their cost competitiveness in the European market, while creating opportunities for Thai businesses with production operations in the country to benefit from the EVFTA.

The DITP recommended that Thai enterprises increase domestic sourcing, raise the share of high-value-added products, and develop partnerships with Vietnamese and European companies. Stronger linkages with local suppliers could enable Thai firms to participate more deeply in supply chains serving the European market.

However, businesses should assess each product individually in terms of production costs, tariffs, rules of origin, and applicable standards to determine whether Vietnam offers advantages in tariffs and supply chains and ensure compliance with EU trade requirements.

The department also highlighted stringent European requirements on environmental standards, traceability, and due diligence. Therefore, it advised businesses to establish traceability systems, document the origins of raw materials, strengthen data management, and improve their capacity to measure and reduce greenhouse gas emissions.

As Vietnam is increasingly regarded by European companies as a manufacturing base and supply-chain hub, establishing production facilities could offer Thai businesses an additional route to the European market. However, the effectiveness of this approach will depend on their ability to meet the rules of origin, standards, and conditions for EVFTA tariff preferences.

The DITP also urged Thai businesses to look beyond cost advantages by improving quality, standards, technology, innovation, and sustainability to strengthen their long-term competitiveness in Europe./.