EVFTA opportunities for Vietnamese coffee beans
Germany is known as the largest coffee consumption market in Europe. According to Eurostat, in 2019, Germany accounted for 26% of the total European coffee consumption with an average of 6.5kg/person/year (higher than the European average of 5.2kg/person/year). In addition, Germany is also the largest importer of green coffee beans (ungrounded coffee) in Europe. In 2019, Germany's imported green coffee beans reached 1.1 million tons, equivalent to 2.3 billion euros, accounting for 34% of the total imports of this product of the whole Europe.
Meanwhile, according to the World Coffee Organization, Vietnam is the second largest coffee growing and producing country in the world after Brazil with an output of 29 million bags (60kg/bag), accounting for 17% of total coffee globally in 2020. Vietnam is also the 5th largest coffee exporting country in the world with export turnover reaching USD 1.98 billion in 2020 (ITC Trademap, 2021).
With the advantages of Vietnam's coffee production and Germany's large coffee consumption demand, for many years, Vietnam has always been one of Germany's biggest coffee suppliers. However, Vietnam's coffee exports to Germany were not stable and tended to decrease in recent years. Specifically, Vietnam's coffee bean exports in the period 2010-2017 fluctuated with an increasing trend, from 286 million USD in 2010 to 567 million USD in 2017, but then decreased continuously to 385 million USD in 2020. However, Vietnam is still the second largest exporter of coffee beans to Germany (after Brazil) in 2020.
Benefits from tariff reduction: The EU is currently applying the average MFN and GSP tariff rates for Vietnamese coffee beans of 4.15% and 2.4%, respectively. In the EVFTA, the EU committed to eliminate 100% of the tariff lines for coffee beans imported from Vietnam at entry into force of this Agreement on August 1, 2020.
Benefits from protection of Geographical Indication
In the EVFTA, Germany committed to protect 01 geographical indication of Vietnam's coffee, that is Buon Ma Thuot Coffee. This will help increase the value and brand name of this product when exported to Germany.
EVFTA full text for more information: https://wtocenter.vn/chuyen-de/12778-eu-vietnam-trade-and-investment-agreements
Source: "Business Handbook: Exploiting the EVFTA to import and export goods between Vietnam and Germany" - Center for WTO and International Trade
