Opportunities from EVFTA for importing goods from Germany into Vietnam

Opportunity from tariff reduction and market opening: This is probably the biggest opportunity from the EVFTA for German exports to Vietnam because currently Vietnam is applying relatively high MFN tariff rates on many of Germany's main export products. The EVFTA is also one of the FTAs ​​that Vietnam has  relatively high commitments to reduce tariffs, much higher than many previous FTAs of Vietnam. Therefore, with the EVFTA preferential tariffs when entering Vietnam, German goods could have reduced prices, thereby offsetting high transportation costs, and having a competitive advantage compared to many other competitors. German product groups that are considered to have many advantages from tariff reductions under the EVFTA are: vehicles, electrical machinery and equipment, plastic products, iron and steel, mineral oil fuels, animal meat and livestock sausages, sausages, milk and dairy products.

In addition, Vietnam shall also allow German companies to access  many procurement packages of many government entities (of 20 ministries, 2 cities, 34 hospitals, etc.). This will create opportunities for German contractors to supply goods for Vietnam through government procurement packages.

Opportunities from the reduction of non-tariff barriers: In the EVFTA, Vietnam has many commitments related to customs reform and trade facilitation, application of Sanitary and Phytosanitary Measures, Technical Barriers to Trade, trade remedies, etc., in compliance with the rules and standards of the EVFTA. These commitments will help reduce unnecessary barriers to trade between Vietnam and Germany.

Although Vietnam is considered as one of the relatively "easy" import markets for foreign goods, some imported products are still subject to many non-tariff measures of Vietnam such as: food, pharmaceutical products, chemicals, means of transport... In addition, many administrative procedures are still inadequate, time consuming and costly for businesses. The implementation of the EVFTA is expected to make it easier for German goods to access the Vietnamese market by reducing non-tariff barriers and reforming customs procedures.

Therefore, all German goods when accessing Vietnam will benefit from Vietnam's commitments on reducing non-tariff barriers. In particular, some German commodity groups will have more advantages from Vietnam's additional commitments, such as: non-agricultural products (thanks to commitments on EU labeling), automobiles - vehicle products - spare parts (thanks to TBT commitments for these products), pharmaceutical products (thanks to commitments on standards and transparency), remanufactured goods (thanks to the commitment on treating remanufactured goods like new ones).

Opportunities from enhanced protection of intellectual property rights: Germany is one of the countries that have the most advanced technology in the world, thus it owns many trademarks, patents and other IPRs. That is why German businesses often pay high attention to IP protection issues when accessing foreign markets. With the EVFTA, Vietnam has many strong commitments both on increasing the protection of IP rights and on strengthening enforcement measures to protect them. In particular, Vietnam committed to recognize 12 German geographical indications, which helps these products to be protected automatically in Vietnam. German product groups that will benefit greatly from Vietnam's IP commitments in the EVFTA are: pharmaceutical products, alcohol and beverages…

Opportunities from cost reduction due to improved legal and business environment: Throughout the EVFTA are commitments made by both Vietnam and the EU towards liberalization, equality, transparency and facilitation for trade and investment between the two sides. On the Vietnamese side, these commitments will make Vietnam's business and legal environment more and more favorable, cutting costs and time for businesses. Since then, when German goods enter Vietnam, whether through import activities, or setting up a representative office/product introduction, or through government procurement, etc., will be more facilitated and easier.

Source: "Business Handbook: Exploiting the EVFTA  to import and export goods between Vietnam and Germany" - Center for WTO and International Trade