Vietnam is the EU's 15th trade in goods partner and the EU's largest trading partner in the Association of Southeast Asian Nations (ASEAN) in 2020. Many trades and investment-related documents and general information are available here. Vietnam is one of the most dynamic economies in the region that has enjoyed an average growth rate of its economy in between 6-8 percent over the last decade. In 2020, official numbers suggest that Vietnam is one of the most resilient economies in the region with an expansion of 2.9 percent. 

The entry into force of the Free Trade Agreement between the European Union and Vietnam (EVFTA) in August 2020 is a milestone in the bilateral economic relationship. The EVFTA text is available in all EU official languages here. 

With an average per capita income of US$ 2715, Vietnam is now a lower-middle-income country. It starts constituting an important market of 100 million inhabitants that have increased the purchasing power to afford European quality products. At this moment, the main products of EU exports to Vietnam include boilers, machinery and mechanical products, electrical machinery and equipment, pharmaceutical products, aircraft and a yet very limited number of motor vehicles. European food and beverages as well as high-value luxury products also are increasingly important trade items. Vietnam's main exports to the EU are telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture.  

Mainly due to the pandemic of Covid-19, the two-way trade shrank by -5.5% to €43.2 billion, according to the Eurostat, or -13.6% to US$49.5 billion according to Vietnam’s General Statistics Office.  

After 25 years of continual growth, in 2020 for the first time, Vietnam’s exports to the EU declined slightly (-0.3%). Vietnam's exports to the EU continued to account for almost two-thirds of the total figure (€34.4 billion). The full implementation of the FTA is expected to open many opportunities for producers and distributors on both sides of every size, including small and medium enterprises. 

In 2020, the EU constituted the third most important overseas market for Vietnamese products. The continuous surplus of €25.6 billion that Vietnam enjoys with the EU significantly helps to balance Vietnam's huge trade deficits with China and South Korea.

The EU purchased as much as 12% of the country's global exports in 2020.  

A concise and still complete statistical overview on key indicators relevant for trade in goods and services, as well as foreign direct investments, is accessible here. 

The EU-Vietnam Free Trade Agreement (EVFTA) and the Investment Protection Agreement (IPA) are modern and comprehensive deals. Whilst the EVFTA has been in force since August 2020, the EU Member States still need to ratify the IPA before it can enter into force. The full text of the two agreements are available here.

EU-Vietnam Free Trade Agreement (EVFTA)

The EVFTA eliminates close to all tariffs, reduces regulatory barriers and bureaucratic red tape, protects graphical indications, provides additional opportunities in services and public procurement markets. 

Practical Guides explain specific aspects of the EVFTA in clear and simple language and can be found here.  A comprehensive guide (updated in 2019) to the EVFTA is available here. The “Access2Markets” portal is designed for EU exporters, in particular SMEs. It provides detailed information on applicable tariffs, rules of origin, product requirements, customs procedures and formalities, VAT/excise duties/sales taxes, trade barriers, and trade statistics. It is accessible here and is available in all 24 official EU languages. 

Intellectual Property Rights

As part of the IPR protection, the EVFTA ensures the protection in Vietnam of European Union Geographical Indications (GIs). Recognition and high level of protection (direct) of GIs comparable level to the one under the EU GI legislation. 167 EU GIs and 39 Vietnamese products are already included in the EVFTA, representing EU flagship agricultural products, such as Champagne, Parmigiano Reggiano cheese, Rioja wine, or Roquefort cheese Vietnamese GIs too are recognized and protected in the EU, such as Mộc Châu tea or Buôn Ma Thuột coffee. 

The South-East Asia IPR SME Helpdesk provides free information and services on Intellectual Property Rights (IPR) and related issues, as well as training, materials and online resources. This IPR SME Helpdesk supports EU enterprises to protect and enforce their intellectual property rights in or relating to Southeast Asian countries. 

Trade and Sustainable Development

Trade and Sustainable Development are an integral part of the EVFTA. Chapter 13 of the EVFTA covers labour and environmental matters relevant to trade relations between the EU and Vietnam. Commitments to the Core Conventions of the International Labour Organisation (ILO) ensure the respect of fundamental workers' rights by both parties. The chapter promotes activities to address climate change and supports the conservation and sustainable management of natural resources (including wildlife, forestry, and fisheries). The chapter also pays attention to Corporate Social Responsibility and fair and ethical trading schemes. 

The EVFTA sets up a dedicated structure to ensure the full implementation of chapter 13, including mechanisms to allow for the involvement of independent economic, social, and environmental stakeholders through Domestic Advisory Groups both in the EU and in Vietnam. 

Foreign Direct Investment

The European Union is only the sixth important sources of foreign investments (FDI) for Vietnam. According to the Foreign Investment Agency of the Vietnamese Ministry of Planning and Investment, investors in the EU injected a total FDI stock of more than US$27.8 billion into 2,450 projects over the course of the past 30 years (by the end of 2022).  More than 60 per cent of total investment are made in the manufacturing sector. Both IPR protection and enforcement and sustainable development conditions are crucial elements for the attraction and retention of FDI from the European Union. Increased EU investments will allow Vietnam to better integrate into global value chains, thereby diminishing the dependence of Vietnam on its current main investors. EU investors are bound by the highest standards for workers' rights and environmental protection, thereby contributing to the wellbeing and further development of the Vietnamese society and economy.  

EU-Vietnam Protection Agreement

The market access dimension for foreign direct investment is already fully covered in the EVFTA. In addition, the Investment Protection Agreement, once fully ratified, includes modern rules on investment protection enforceable through the novel Investment Court System whilst ensuring that the right of the governments on both sides to regulate in the interest of their citizens is preserved. The EVIPA will replace the bilateral investment agreements that 21 EU Members States currently have in place with Vietnam. 

Further contacts for businesses

In addition to Member States embassies and national business associations, the European Chamber of Commerce may also be available for specific information on Vietnam.

The European Union (EU) has supported Vietnam’s efforts towards poverty reduction, sustainable development and integration into the world economy. Since 1990, the EU has provided Vietnam with substantial grants for specific projects and programmes.  

The EU development policy is enshrined in the European Consensus on Development, adopted in May 2017. This ambitious collective European development policy addresses in an integrated manner the main focus points of the 2030 Agenda: people, planet, prosperity, peace and partnership.

Global Gateway Strategy

In December 2021, the EU launched its new Global Gateway Strategy, which stands for sustainable and trusted connections that work for people and the planet. It helps to tackle the most pressing global challenges, from fighting climate change, to improving health systems, and boosting competitiveness and security of global supply chains. It is the new overarching European strategy to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world.

Between 2021 and 2027, Team Europe, meaning the EU institutions and EU Member States jointly, will mobilise up to €300 billion of investments for sustainable and high-quality projects, taking into account the needs of partner countries and ensuring lasting benefits for local communities. This will allow EU’s partners to develop their societies and economies, but also create opportunities for the EU Member States’ private sector to invest and remain competitive, whilst ensuring the highest environmental and labour standards, as well as sound financial management. It is in line with the commitment of the G7 leaders from June 2021 to launch a values-driven, high-standard and transparent infrastructure partnership to meet global infrastructure development needs. The Global Gateway is also fully aligned with the UN’s Agenda 2030 and its Sustainable Development Goals, as well as the Paris Agreement.

The Global Gateway is the EU’s contribution to narrowing the global investment gap worldwide. In this context, the EU is using an ever-growing share of its non-reimbursable grants to boost development related investments, aiming to address risk, capacity, affordability or regulatory constraints.

The European Fund for Sustainable Development Plus (EFSD+) is the main financial tool to mobilise investments under the Global Gateway Strategy, seeking to increase the financial leverage and transformational impact of its cooperation. This innovative instrument generates investments through guarantee capacity and blending grants, and represents a major source of climate finance.

Partnership and Cooperation Agreement

Within the context of the objectives of the Global Gateway Strategy, EU development cooperation is implemented in Vietnam in the framework of the EU-VN Partnership and Cooperation Agreement (PCA). The PCA, in force since 2016, broadens the EU-Vietnam dialogue and cooperation scope in the areas of multilateralism, international security and defence, trade, environment, energy, science and technology, good governance, human rights, as well as, tourism, education, culture, migration and the fight against corruption and organized crime.

Priorities of development EU-Vietnam Development Cooperation

Following substantial consultations with Government authorities, private sector, civil society and a wide range of international partners of Vietnam, the EU adopted a new Multiannual Indicative Programme covering 7 years in 2021. The Multiannual Indicative Programme 2021-2027 states three priority areas:

1. Climate-responsive digital circular economy;
2. Responsible entrepreneurship and enhanced skills for decent employment;
3. Strengthening governance, rule of law and institutional reform.

The overall indicative amount to be provided to support the development of Vietnam in the above sectors during the initial period 2021-2024 is EUR 210 million in grants.

Prior to the current programme, the Multiannual Indicative Programme 2014-2020  has contributed to Viet Nam's socio-economic development particularly by developing a sustainable energy sector and by strengthening governance and the rule of law. 

Currently, the main areas of ongoing support funded from the earlier and the current 7-year programmes, cover a variety of areas of support, including among others energy transition, climate action and green sustainable development, economic governance including public finance management, digital transformation, and the promotion of rule of law and access to justice.

Programmes, which are currently being prepared, envisage to support the promotion of women-led green partnerships, enhancing decent work and technical and vocational education and training, improving forest governance and forest-based value chains, and additional support to access to justice and adherence to human rights.

Team Europe

The EU and its Member States work together as Team Europe. Jointly, they are one of the most important donors in grants to Vietnam. EU grants to Vietnam are used in line with the country's socio-economic policies and come in support of the government’s efforts to restructuring the economy with the aim of ensuring long term growth and welfare for its citizens.

The two main areas, in which the EU and its Member States are joining hands to support Vietnam are the following two Team Europe Initiatives:

1. Climate-responsive digital circular economy

2. Responsible entrepreneurship and enhanced skills for decent employment

These initiatives are fully reflected in the EU’s multi-annual indicative programme as priority one and 2.

Additionally, the EU and its Member States are making efforts to also take joint approaches in the areas of digital transformation, energy transition, forestry, sustainable transport and support to the Mekong Delta region, among others.

The JETP Political Declaration (PD) was signed on 14 December 2022 (Brussels EU-ASEAN Summit) by Vietnam and the International Partners Group (IPG)[1], with the EU and the UK as co-leads.

JETP aims to support Vietnam to deliver on its ambitious net zero goal, accelerate the peaking of its greenhouse gas emissions and transition away from fossil fuels to clean energy.

JETP will mobilise an initial 15.5 billion USD of public and private finance over the next three to five years.

If achieved, JETP will bring forward the projected peak date for all greenhouse gas emissions in Vietnam from 2035 to 2030.

• It also seeks to reduce peak annual power sector emissions by up to 30 percent, from 240 megatons to 170 megatons in 2030, and bringing forward the peaking date of the power sector by five years to 2030.
• Limiting Vietnam's peak coal capacity to 30.2 gigawatts, down from a previously planned figure of 37.0 gigawatts (2030).
• Accelerating the adoption of renewables so that c energy accounts for at least 47 percent of electricity generation by 2030, up from the current planned generation share of 36 per cent.

[1] The IPG consists of the EU, the UK, the US, Japan, Germany, France, Italy, Canada, Denmark and Norway.