The total trade value for between the two parties has doubled since More specifically, starting late and early , container shipping rose significantly figure 2. The EU mainly imports electronic wares e.
The top export categories from the EU to Vietnam are high-end electronic devices and machinery, transport equipment, and pharmaceutical products. The latter two categories are the subject of a specific Annex addressing the trade of these goods between the two parties. The more relevant question here is: how can European logistics players benefit from this free trade agreement? The elimination of tariffs on a number of goods categories should increase shipping demand after the ratification.
In the short-term future, an increase is likely, especially on trade from the EU to Vietnam for machinery and appliances, where the tariff will be removed once the FTA enters into force. In the meantime, for certain types of goods, which account for a large proportion of bilateral trade, there is a 7 to 10 years transition period.
For these goods, the increase in shipping demand may come at a much later stage. The FTA can also provide EU investors with an excellent opportunity to engage in the Vietnamese maritime shipping market. Liberalizing the Vietnamese transport market can foster the export of European transport services to Vietnam. The simplification of the Vietnamese custom clearance process under the FTA will also facilitate trade and shipping.
In recent years, Vietnam has made rapid progress in its logistics performance. However, two indicators of the logistics performance, international shipments, and customs, show little improvement in the past decade. The two indicators measure Vietnam's ability to offer a competitive price and reducing the red tape in the customs clearance process. The former may get improved by opening up the shipping market in Vietnam. The latter, which is associated with the administrative procedure, is expected to improve through the implementation of the free trade agreement.
