Germany has high demand for pepper. (Photo: VNA) Hanoi (VNA) – Vietnam-Germanytrade relations will thrive on the back of the freshly inked free trade andinvestment deals, including the EU-Vietnam Free Trade Agreement (EVFTA) and theEU-Vietnam Investment Protection Agreement (EVIPA), according to insiders.
Nguyen Son Tra, deputy headof the WTO and Trade Negotiation Division under the Ministry of Industry andTrade’s Multilateral Trade Policy Department, said the EVFTA will bringdistinct advantages to Vietnamese goods as right after the deal takes effect,85.6 percent of the tax lines imposed on Vietnamese goods, or 70.3 percent ofthe country’s exports to the EU will be reduced in the first year.
Meanwhile, the lifted tariffswill be 99.2 percent, or 99.7 percent of the country’s total export turnover tothe bloc, in the next seven years, she said.
Particularly, Germany,together with the UK and the Netherlands, has been Vietnam’s leading importerin the EU since 2017. According to statistics from the General Department ofVietnam Customs, two-way trade reached 9.5 billion USD in 2017, with Vietnamshipping some 6.3 billion USD worth of commodities to Germany. Exports to theEuropean country continued to increase to 6.68 billion USD the following year.
In the first half of 2019,Vietnam earned over 3.3 billion USD from selling products in the German market.Key earners comprised footwear, garment and textiles, coffee, seafood, cashewnuts and pepper, among others.
There is huge room forVietnamese commodities to enter Germany, where consumers have increasingdemands for imports. Last year, Germany became the world’s second largestpurchaser of furniture with import revenue making up 8.1 percent of the world’stotal amount.
Although local furniture firmshave tried to penetrate the German market, their market share remains modest. Inthe first quarter of 2019, Vietnam’s furniture exports to the country onlystood at 80.8 million USD, much lower than the market’s demand.
Vietnam’s Trade Office inGermany said the European country is the world’s second biggest importer ofpepper, accounting for 10.1 percent of the total import revenue in 2017.
As the second largest supplier of pepper for Germany, just behind Brazil, Vietnamships average 5,000 tonnes of pepper to the market each year. In 2018, Vietnampocketed 35.11 million USD from exporting 8,510 tonnes of pepper to Germany, up5.61 percent in volume but down 34.45 percent in value due to low prices.
Meanwhile, Marko Walde,Chief Representative of the German Chamber of Industry and Commerce in Vietnam,said the EVFTA and EVIPA will open export opportunities and boost investmentactivities for enterprises of both nations.
There are some 300 Germanfirms operating their business in Vietnam, 55 percent of which have plans toexpand investment in the Southeast Asian nation.
Unlike 20 years ago whenGerman firms invested heavily in China, they are now seeking to move theirproduction bases to another country, and Vietnam and Thailand are considered asthe most promising destinations, he said.
Walde suggested theVietnamese Government complete legal frameworks soon so as to build confidenceamong foreign investors.-VNA
VNA
