Maximizing the EVFTA with DHL Express

The EU-Vietnam Free Trade Agreement (EVFTA) is a landmark agreement that unlocks unprecedented opportunities for Vietnamese businesses. By eliminating nearly all tariffs and trade barriers between Vietnam and the European Union, the EVFTA provides access to a vast and lucrative market, allowing Vietnamese exporters to expand their reach and boost their competitiveness.

Understanding the EVFTA: Key provisions and advantages

Tariff elimination

The EVFTA is progressively eliminating 99% of all customs duties between Vietnam and the EU over a 10-year period.¹ This phased approach provides significant tariff advantages for Vietnamese exporters, including:

• Immediate elimination: Upon the EVFTA’s entry into force, a wide range of products saw tariffs eliminated immediately. These products, classified under staging category "A" in the EVFTA’s tariff schedule, received a significant boost in market access, which benefits exporters in those sectors.
• Gradual reduction: Other product categories are experiencing a gradual reduction of tariffs over several years, following a specific schedule outlined in the EVFTA. This phased approach, with products categorized under B3, B5, B7, and other staging categories based on their reduction timelines, allows businesses to adapt and strategically plan their exports.

Market access

Beyond tariff elimination, the EVFTA focuses on dismantling non-tariff barriers that hinder trade between Vietnam and the EU. This includes:

• Simplified customs procedures: The EVFTA streamlines customs procedures, reducing red tape and facilitating faster clearance of goods. This minimizes delays and administrative burdens for businesses, making it easier and more efficient to export to the EU. 
• Reduced regulatory barriers: The agreement tackles technical barriers to trade by promoting the harmonization of standards and conformity assessment procedures. This reduces the complexity and cost of compliance for Vietnamese exporters, making it easier to meet EU requirements.
• Enhanced transparency: The EVFTA fosters greater transparency in regulations and trade policies, ensuring that Vietnamese businesses have clear and predictable access to the EU market. This reduces uncertainty and risk, encouraging greater trade and investment.
• New opportunities in services: The agreement extends beyond trade in goods to open up new opportunities for Vietnamese businesses in the service sector, allowing Vietnamese service providers to expand their reach into the EU market.

Vietnam's export powerhouse: Major products heading to Europe

Agricultural products

Vietnam's agriculture sector is a vital contributor to its export success, with a range of products potentially finding favor in the European market due to the EVFTA, such as:

• Coffee: Vietnam is renowned for its high-quality coffee beans, ranking third in global coffee exports in 2022 with a value of US$3.37 billion². The implication of EVFTA on tariffs makes Vietnamese coffee even more enticing to European buyers, boosting the potential for increased market share.
• Rice: Vietnam's fragrant rice varieties are a staple in many European kitchens, having exported 104,000 tons of rice to the EU market in 2023.³ The EVFTA’s tariff reductions on exports further enhance the competitiveness of Vietnamese rice, creating opportunities for exporters to expand their reach in the EU market.
• Seafood: Vietnam's abundant seafood resources are highly sought after in Europe, with over US$900 million worth of seafood imported in the first 10 months of 2024 alone.⁴ The EVFTA’s elimination or reduction of tariffs makes them a more appealing prospect for European importers and consumers, driving potential growth in export volumes.
• Fruits and vegetables: Europe is the third largest consumer of Vietnamese fruits and vegetables, with US$399 million worth of imports purchased in 2023.⁵ The EVFTA has unlocked new opportunities for Vietnamese exporters in this sector to further access the European market, capitalizing on the increased demand for their fresh produce.

Textiles and garments

Vietnam's textile and garment industry is one of the main areas of its export economy, with global exports hitting US$20.2 billion from January to July 2024 alone.⁶ The EVFTA has reinforced its position in the European market through:

• Competitive advantage: What drives this industry is Vietnam's skilled workforce, competitive labor costs, and well-established supply chain. These are further strengthened by the EVFTA’s preferential market access and stable trade environment, allowing exporters to offer attractive prices and build stronger relationships with European buyers.
• High-quality products: Vietnamese manufacturers' focus on producing high-quality garments and textiles. Coupled with the EVFTA’s promotion of international standards and best practices, this enables them to compete effectively in the EU, building a strong reputation and enhancing brand recognition.

Electronics and machinery

Vietnam's electronics and machinery sector has witnessed remarkable growth for the following reasons:

• Manufacturing powerhouse: Vietnam has become a key manufacturing hub for electronics and machinery, including smartphones, computers, and various electronic components, with US$55.54 billion in profits earned in 2022 from electronics exports alone.7 The EVFTA’s elimination of tariffs on various types of electronic products strengthens their competitive position in the EU market, paving the way for increased exports.

• Innovation and technology: Like in many other industries, Vietnamese companies are increasingly embracing innovation and technology to enhance their competitiveness in the electronics sector. The EVFTA provides a valuable platform for these businesses to showcase their capabilities and gain a foothold in the European market, appealing to the growing demand for advanced technology. 

Tips for Vietnamese exporters to leverage the EVFTA

Understand the rules of origin

Businesses should understand what the Rules of Origin are, with an emphasis on:

• Compliance: Vietnamese exporters must understand and comply with the EVFTA’s rules of origin to avoid paying higher tariffs and maintain their competitiveness in the EU market. This involves ensuring that their products meet the specific criteria outlined in the agreement.
• Documentation: Exporters need to provide proper documentation as proof of the origin of their goods. This may include certificates of origin, declarations of origin, or other supporting documents that demonstrate compliance with the rules of origin.
• Expert guidance: Navigating the complexities of rules of origin can be challenging. Seeking expert guidance from customs brokers, trade consultants, or logistics providers like DHL Express can help exporters ensure compliance and avoid potential pitfalls.

Build strong relationships with European partners

Building strong and lasting relationships with European partners is essential for long-term success in the EU market. Here’s how:

• Trust and reliability: Vietnamese exporters can build trust by consistently delivering high-quality products, meeting deadlines, and providing excellent customer service.
• Communication and collaboration: Exporters should be proactive in communicating with their European partners, understanding their needs, and addressing their concerns.
• Cultural understanding: Developing a cultural understanding of the European market can help Vietnamese exporters build rapport and navigate business interactions more effectively. This includes understanding business etiquette, communication styles, and consumer preferences.

Adapt to European market preferences

Understanding and adapting to European market preferences is crucial for Vietnamese exporters to succeed in the EU.

• Quality standards: Vietnamese exporters need to ensure that their products meet these standards and comply with relevant EU regulations. This may involve investing in quality control processes, obtaining certifications, and conducting product testing.
• Labeling requirements: The EU has strict labeling requirements for various products. Vietnamese exporters need to ensure that their products are labeled correctly in accordance with EU regulations. This includes providing information in the appropriate languages, using the correct units of measurement, and displaying mandatory labels and warnings.
• Sustainability considerations: Sustainability is a growing concern for European consumers. Vietnamese exporters can appeal to this market by adopting sustainable practices, such as using eco-friendly materials, reducing waste, and promoting fair labor practices. This can also enhance their brand image and attract environmentally conscious buyers.

Maximizing the EVFTA: How DHL Express can help

Customs expertise

DHL Express team can help your business with:

• Navigating complex regulations: EU customs regulations can be complex and may vary depending on the product. DHL Express’s customs experts can help exporters understand and comply with these regulations, minimizing the risk of delays, penalties, or rejected shipments.
• Documentation and compliance: Proper documentation is essential for smooth customs clearance. DHL Express can assist exporters with preparing and submitting the necessary documents, ensuring accuracy and compliance with EU requirements.
• Tariff classification and valuation: Correct tariff classification and valuation are crucial for determining the applicable duties and taxes. DHL Express’s customs experts can help exporters determine the correct classification and valuation of their goods, minimizing the risk of errors and delays.

Efficient shipping solutions

DHL Express offers a comprehensive range of overseas shipping solutions tailored to the needs of exporters, including:

• Express delivery: For time-sensitive shipments, DHL Express offers express overseas shipping from Vietnam with door-to-door tracking and guaranteed delivery times. This ensures that your goods reach European customers quickly and reliably.
• Air freight: For larger shipments or those requiring faster transit times, DHL Express provides air freight services with comprehensive tracking and monitoring capabilities. This ensures that your goods are transported safely and efficiently to their destination.

Value-added services

DHL Express also provides the following: 

• Cargo insurance: Protect your valuable shipments with DHL Express' shipping insurance options, providing peace of mind and financial security in case of unforeseen events.
• Warehousing and distribution: DHL Express offers warehousing and distribution services in Europe, allowing you to store your goods closer to your customers and streamline your supply chain.
• Customized solutions: DHL Express can work with you to develop customized solutions tailored to your specific needs, ensuring you can send international parcels without worrying about the complexities of logistics, customs clearance, or potential delays. 

Unlocking your export potential with the EVFTA

The EVFTA has ushered in a new era of trade between Vietnam and the EU, creating unprecedented opportunities for Vietnamese exporters to expand their reach and tap into a vast and dynamic market. By understanding the key provisions of the EVFTA, complying with regulations, and partnering with a reliable logistics provider like DHL Express, businesses can unlock their full export potential and thrive in the European arena.

Don't miss out on the chance to seize these opportunities. Create a DHL Express business account today to access cost-effective shipping services and resources designed to support your export journey to Europe. Let DHL Express help you navigate the complexities of international trade and achieve your business goals in the exciting European market!