How to grasp opportunities and challenges from major export markets

The EU and the United States will remain Vietnam’s major export markets in the year ahead, with plenty of opportunities to increase key export products again amid many challenges in which local businesses need to outline proper orientations aimed at dealing with future issues, according to forecasts made by the Ministry of Industry and Trade (MoIT).

Tran Ngoc Quan, Vietnamese trade counselor in Belgium and the EU, says there have been some significant bright spots in the EU market, especially Belgium which has forecast that Vietnamese export of many consumer goods will increase this year to these lucrative markets.

Currently, inflation has seen a sharp fall, people’s incomes have increased sharply again, energy prices have gradually stabilized, and the supply chain has also gradually been restored.

Economic experts therefore predict that the EU’s economy will record slight growth at about 1% this year before seeing stronger growth at 1.5% in 2025.

This also means that the bloc’s trade growth will have a recovery of roughly 1.7% for imports into the EU and about 1.1% for exports from the bloc to other countries, instead of the more than 15% decline seen in its international trade in 2023.

Quan says in addition to price factors, import regulations in 2024 will be increasingly carried out, mainly related to the circular economy, sustainable development, and both clean and green development issues.

Specifically, carbon balance mechanisms directly related to export products such as steel, cement, and fertiliser will start to be applied from June.

​Accordingly, any related businesses must declare relevant EU declarations, which are viewed as complicated and require time to carefully study regulations on food quality and safety for all food product groups imported into the bloc.

This year the EU-Vietnam Free Trade Agreement (EVFTA) has entered its fourth year of enforcement. The tax cuts have created a big difference in the European market between the Vietnamese side and its competitors in several Asian countries, many of whom are hoping to sign a free trade agreement with the EU.

​Therefore, Vietnamese firms need to proactively acquire knowledge and improve understanding of EU standards and regulations in order to take full advantage of the benefits from the EVFTA.

Accordingly, it can be viewed as necessary to focus on improving management, human resource quality, and technological innovation, whilst also quickly building and developing brands as well as establishing long-term business strategies in this market.

​​With regards to the US market, one of the country’s important trade partners and major export markets, forecasts anticipate their GDP growth to reach 1.7% to 2% in the year ahead. This is a very positive signal, showing that the US economy is on the track to recovery, duly creating opportunities to restore growth for many key Vietnamese export products in the coming time, such as textiles and garments, footwear, electronic components, and seafood.

However, according to Do Ngoc Hung, Vietnamese trade counselor and head of the Vietnam Trade Office in the US, because the country is the third largest export surplus country to the US market, only behind China and Mexico, the American side finding ways to reduce imports to protect domestic their own manufacturing industries will have a significant impact on Vietnamese export activities. Currently, the Vietnam Trade Office in the host country is taking a range of measures to support local businesses.

Appreciating the role of counselors and trade agencies in other countries in promoting trade of goods into markets such as the EU and the US, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan requested that these agencies quickly grasp and promptly inform state management agencies and the business community about new standards and laws from international markets, especially following the trends of the year.

To capitalise on opportunities and develop sustainable exports in major markets such as the EU and the US, MoIT representatives recommend that businesses promote diversification of product industries and export markets.

This should be done alongside proactively improving technology so that goods have high added value and deep processing content, while meeting standards of the green economy and circular economy, thus improving labour productivity and actively engage in the global supply chain.