The Law on Enterprise Due Diligence in the Supply Chain requires Vietnamese enterprises to provide additional certifications related to the origin of products, labor usage status, wages paid to workers, factory waste treatment methods, etc.

Vietnam's export growth to Germany in the first half of 2024 is mainly due to agricultural and aquatic products.

According to statistics from the General Department of Vietnam Customs, in the first 6 months of 2024, the total import-export turnover between Vietnam and Germany reached over 5.57 billion USD, an increase of 1.75%. Of which, Vietnam's exports to Germany reached 3.82 billion USD, an increase of 3.2%, and Vietnam's imports from Germany reached about 1.75 billion USD, a decrease of 1.2%. Thus, Vietnam's trade surplus with Germany reached 2.06 billion USD, an increase of 7.18%.

BRIGHT SPOTS IN EXPORTING AGRICULTURAL AND AQUACULTURE PRODUCTS AND ELECTRONICS

Germany is Vietnam's second largest trading partner in the EU after the Netherlands (growth of 26.4%, reaching 6.5 billion USD) with import-export turnover accounting for 17% of Vietnam's trade with the EU, of which exports accounted for 15% and imports accounted for 23%.

Vietnam's export growth to Germany was mainly achieved thanks to the agricultural and aquatic products and electronics group.

For the agricultural and aquatic products group, the export turnover of this group reached 640.3 million USD, up 39.4%, in which all items with recorded exports in this group achieved positive growth. Specifically, coffee reached over 383.4 million USD, up 37.4%; aquatic products 94.3 million USD, up 10.7%; cashew nuts reached over 63.6 million USD, up 33.1%; pepper reached over 48 million USD, up 156.6%; Vegetables and fruits reached 32.2 million USD, up 118.3%; rubber reached 18.3 million USD, up 35.6%; tea reached 514 thousand USD, up 2%.

The group of processed and manufactured goods, although the overall export turnover of the group decreased by 0.95%, still had some bright spots when the decrease was narrowed (5 months of 2024 when the turnover decreased by more than 2%).

The turnover increased sharply in the telephone item reaching 431.7 million USD, up 23.2%; computers, electronic products and components reaching 422.5 million USD, up 29.2%; plastic products reaching 84.2 million USD, up 30.2%, wood and wood products reaching 44.6 million USD and up 46.3%. Vietnamese wooden products exported to Germany are mainly furniture, accounting for 85.3%.

In addition, some products with strong export value from Vietnam to Germany recorded a decrease, including: footwear of all kinds reaching 369.9 million USD, down 21.45%; textiles reached 363.6 million USD, down 18.3%; handbags, wallets, suitcases, hats and umbrellas reached 82.2 million USD, down 14%; toys, sports equipment and parts reached 45 million USD, down 62%.

The reason for the decline in this group of products is said to be due to the difficult German economy, rising inflation, people tending to tighten spending on non-urgent and reusable consumer products as well as huge competition from countries producing similar products such as China, India, Turkey when they are also having excess production.

CHALLENGES OF MEETING TECHNICAL STANDARDS AND RULES OF ORIGIN IN EVFTA

According to the Vietnam Trade Office in the Federal Republic of Germany, exports to this market are facing many challenges when having to meet new technical standards.

Specifically, the EU's technical standards for wooden products, textiles, and footwear are related to product safety, restrictions on the use of certain chemicals in products, regulations on CE labeling, etc., and especially regulations related to corporate social responsibility.

For example, Germany applies the Law on Obligation to Due Diligence in the Supply Chain. This law indirectly affects Vietnamese exporters. Importers can request Vietnamese enterprises to provide additional certificates related to the origin of the product, the status of labor use, wages paid to workers, the method of handling factory waste, etc.

Certifications such as: BSCI certification of the Amfori Global Business Association for Sustainable Trade, SA 8000 certification (system of social responsibility standards, etc.), SEDEX/Smeta certification, FSC on sustainable forest management, green button standards in the textile industry.

In addition, there are requirements on rules of origin to enjoy tariff preferences in EVFTA... The Vietnam Trade Office in the Federal Republic of Germany believes that in reality, many raw materials and products of Vietnam are still dependent on import sources, especially from China and some other Asian countries.

"Complying with the rules of origin in EVFTA is a big challenge for Vietnamese enterprises to take advantage of tariff preferences from this Agreement", the Vietnam Trade Office in the Federal Republic of Germany emphasized.

When there is doubt about the origin, German customs will require the importer to pay a guarantee tax and this tax will be refunded when there is a verification result of the accuracy of the set of documents on the rules of origin according to the regulations in EVFTA.

To boost exports to the German market, the Vietnam Trade Office in the Federal Republic of Germany believes that enterprises need to have a plan to participate in specialized fairs and trade promotion activities to find partners and business opportunities.

For example, the German furniture fairs are in cities like Stuttgart, Nurnberg, Koln, Hannover. The major international furniture fairs are IMM Koln, Interzum in Koln.

Textile Fairs: HeimTextil Fair in Frankfurt, H+H in Cologne, Tecstyle visions in Stuttgart... Footwear Fairs: International Leather Goods Fair in Mainz, Shoes in Dusseldorf.

Mechanical Fairs: Hannover Messe (on machinery, automation, technology...); BAUMA (on construction machinery), EMO Hannover (metal processing machinery and technology), AUTOMECHANIKA Frankfurt (automobiles, spare parts and components), INTERPACK (machinery, equipment and solutions for the packaging and processing industry...)...

According to the assessment of the European and American Market Department (Ministry of Industry and Trade), these large specialized fairs attract many buyers from Europe to look for partners. This is an opportunity for Vietnamese goods to further expand their market share in Germany in particular and Europe in general.

Source: VnEconomy