Five-year trade between Vietnam and the EU hits a staggering $300 billion mark

Five-year trade between Vietnam and the EU hits a staggering $300 billion mark

The Euro-Vietnam Free Trade Agreement (EVFTA), which came into effect in August 2020, has significantly increased trade between the European Union (EU) and Vietnam. Over the past five years, two-way trade has reached an impressive $298 billion, positioning Vietnam as the EU’s largest trading partner in ASEAN and the 16th globally.

The agreement has removed over 70% of tariffs on goods, with the remaining tariffs scheduled for elimination in the coming years. This has facilitated substantial growth in exports and imports between the two sides. Vietnam primarily exports electronics, textiles, furniture, and agricultural products to the EU, while importing machinery, green technologies, pharmaceuticals, and vehicles from Europe.

Small and medium-sized enterprises (SMEs) have notably benefited from the agreement. According to the latest EuroCham Business Confidence Index from Q2 2025, 66% of surveyed businesses are actively engaged in EU-Vietnam trade, with nearly all aware of the EVFTA. Approximately half of these businesses reported moderate to significant benefits from tariff reductions, which have lowered costs and improved competitiveness. SMEs have relied heavily on the preferential tariffs enabled by certificates of origin (C/O), with over 1.8 million preferential C/Os issued by Vietnam in 2024 supporting exports valued at more than US$100 billion.

However, challenges remain, particularly related to the rules of origin requirements. Many Vietnamese enterprises depend on imported raw materials and components from countries outside the agreement, complicating the certification process and sometimes increasing costs due to discrepancies in customs valuation. Despite these difficulties, the EVFTA continues to serve as a catalyst for stronger economic integration, trade growth, and alignment of standards between the EU and Vietnam.

The EVFTA has also enhanced market access, strengthened intellectual property protections, and improved regulatory transparency, thereby creating a more favorable trade environment. European firms have wide-ranging opportunities for deeper supply chain integration and long-term market expansion in Vietnam. The remaining tariff reductions, up to 99%, will be phased in over the next few years, further boosting trade and investment opportunities.

Effective EVFTA implementation is a catalyst for broader reform, market expansion, and long-term resilience. The agreement has catalysed nearly $300 billion in two-way trade between the EU and Viet Nam over the past five years, accounting for nearly 40% of the cumulative trade recorded over 30 years of economic and trade cooperation since 1995. The EU remains a highly attractive destination for Vietnamese exporters, offering a premium market for high-quality goods.

In conclusion, the EVFTA has proven to be a successful agreement, significantly boosting trade and economic integration between the EU and Vietnam. The benefits for SMEs, in particular, have been substantial, with many businesses reporting lower costs, improved competitiveness, and increased exports. Despite challenges, the EVFTA continues to serve as a catalyst for stronger economic ties and long-term resilience between the two regions.

1. The technology sector in Europe has witnessed an uptick in relations with Vietnam, given the significant increase in trade due to the EVFTA.
2. Bosch, a German multinational engineering and technology company, has expanded its business in Vietnam, capitalizing on lower tariffs and increased market access under the EVFTA.
3. The environmental impact of the EVFTA is under scrutiny, with sustainability-focused businesses calling for stricter regulations to mitigate the climate change effects from increased trade and energy consumption.
4. European-Vietnamese cooperation in AI and green technologies has potential for growth, allowing the EU to provide advanced solutions to Vietnam's energy needs, fostering a cleaner and more efficient energy landscape.
5. Cultural exchange programs have emerged as a beneficial side effect of the EVFTA, with EU art, music, and sports gaining popularity in Vietnam while Vietnamese traditions continue to spread across Europe.
6. Following the EVFTA, Vietnam's agriculture industry has expanded to include high-value produce for export to the EU, changing farming practices and premium product recognition for environment-friendly farming methods.

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