Dinh Thi Hoang Yen, Head of the Vietnam Trade Office in Austria (concurrently Slovenia), talked with Vietnam Economic News’ Phuong Lan about the EU-Vietnam Free Trade Agreement’s (EVFTA) impacts on Vietnam-Austria trade.

How has the EVFTA impacted on Vietnam-Austria trade?

Under the agreement, tariffs and non-tariff barriers have been significantly reduced. The bilateral trade value increased from EUR1.19 billion in 2020 when the agreement took effect to EUR1.62 billion in 2023, with Vietnam earning an annual trade surplus of EUR1 billion plus.

Vietnam has become the 23rd largest exporter to Austria, selling goods worth EUR1.4 billion to this market, up 2.5 percent from 2022, and reaching a market share of 0.7 percent (surpassing India). Meanwhile, the country ranks 57th among importers of goods from Austria, with an import value of EUR206 million, 9.1 percent less than 2022, accounting for 0.1 percent of Austria’s total import value. Vietnam’s exports to Austria continue to grow, contributing to strengthening Vietnam’s economic, trade relations with EU countries.

What are the strengths and weaknesses of Vietnamese goods?

Vietnamese goods in Austria, including textiles and garments, footwear, electronics, fruits, seafood, cereals, coffee, pepper, cashews, cinnamon, and star anise, have competitive prices and are of high quality.

This competitiveness and the EVFTA have recently made it possible for us to facilitate the direct export of some Vietnamese goods to Austria. Previously, Vietnamese goods, including Loc Troi rice, Luong Quoi coconut milk, and Habeco beer, among others, were exported to Austria through a third country.

However, branding is a significant weakness of Vietnamese goods. Dr. Christopher Kummer, CEO of the Institute for Mergers, Acquisitions and Alliances (IMAA), said Vietnamese companies should consider creating or acquiring European brands to penetrate the Austrian market.

What should be done to further boost the bilateral trade?

Austria has core technology for green industry and green energy. Industrial cooperation between Vietnam and Austria currently focuses mainly on machinery, transportation, and cable cars, mostly related to orders from private Vietnamese companies, including car design projects between VinFast and AVL List and Magna Steyr, cable car projects by Doppelmayr, fire truck projects by Rosenbauer, crane projects by Palfinger, and hydroelectric projects by Andritz.

Vietnam and Austria signed an investment promotion and protection agreement in 1995, a health cooperation agreement in 1995, a dual taxation avoidance agreement in 2008, and a financial cooperation agreement in 2008. Vietnam’s Ministry of Planning and Investment and Austria’s Federal Ministry of Labor and Economy launched a joint committee mechanism. The 10th session of the Joint Committee was held in Austria on June 20, 2022, discussing cooperation in the fields of economic development, trade, investment, energy, mining, finance and banking, health, science and technology, education, vocational training, tourism, environment, transportation, agriculture, and disaster prevention. I think that a new financial cooperation agreement between the two countries should be signed, and the next session of the Vietnam-Austria Joint Committee should be held to further bilateral trade.

What will the Trade Office do to boost bilateral trade?

Data of the General Department of Vietnam Customs show that in the first seven months of 2024, the bilateral trade value reached more than US$1.49 billion, with Vietnam earning an export value of US$1.25 billion, an import value of US$239 million, and a trade surplus of almost US$1 billion.

We will continue to provide Vietnamese businesses with market information, including information about business opportunities in Austria; and support the organization of trade delegations and exchange events that can help companies from both countries establish and strengthen their relationships.

We will also coordinate with relevant authorities to enhance cooperation in logistics through the Port of Koper (Slovakia); and strengthen cooperation in areas of mutual strength, particularly in foundational industries such as machinery, processing, and manufacturing, as well as in new areas of cooperation like energy transition, science and technology application, and innovation.

Source: Vietnam Economic News

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