Exports to EU might decline by 6-8 percent in Q1, Q2

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According to the Ministry of Industry and Trade (MoIT), the prospect of import-export growth between Vietnam and the EU in the first three months of this year is fairly low, with Vietnam’s export turnover in the first and second quarters of this year to the EU being forecast to possibly drop by 6-8 percent if the disease lasts until June.
Amid the information that the EU closes its border gates will affect significantly the import-export of goods of Vietnam, the MoIT said that the disease control regulations of the EU, in the short term, might not affect directly the import-export activities between the EU and Vietnam as these regulations only apply to the individual traveling route so the activities of transportation and trade of goods basically are not restricted.

Mrs. Ursula Von der Leyen, the President of the European Commission emphasized that goods and basic services to the EU need to be continuously circulated to ensure the supply, especially essential goods, including food, components, and medicine.

However, according to the ministry, the EU’s disease control measures will affect the velocity of circulation of goods from the stages of export, transportation, customs clearance, storage, loading, to the stage of consumption; cause disruption or delay the economic-trade-service flow. Moreover, the supply and demand of the market, the demand to exchange goods and the trade activities between the EU and its partners, including Vietnam, will partly be restricted. The demand for nonessential products, such as garments and textiles, footwear, wooden products, and cell phones which are key export products of Vietnam to the EU will possibly decline. It is forecast that the purchasing power for agricultural products and foodstuffs will be maintained.

Unfortunately, the export of goods to the EU by air might be affected greatly as many flights are delayed, canceled, or reduced. Regulations relating to the disease control might also cause sluggishness in signing export contracts in the near future between Vietnam and EU partners, obstruct trade and investment promotion activities, prevent the travel of experts and workers in restricted areas in the context of tightening the isolation to combat the Covid-19 pandemic.

The ministry said that the prospect of import-export growth between Vietnam and the EU in the first three months of this year is fairly low. Vietnam’s export turnover in the first and second quarters of this year to the EU is forecast to possibly drop by 6-8 percent if the disease lasts until June. However, the export growth of the last half of this year might be more optimistic as the disease is control and the EU-Vietnam Free Trade Agreement takes effect.

By Van Phuc – Translated by Bao Nghi

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