EU Urges Vietnam to Reduce Trade Barriers Amidst Growing Deficit
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EU to press Vietnam on Trade Barriers as Deficit Widens
Table of Contents
European Union officials will urge Vietnam to reduce administrative hurdles for EU goods, addressing a growing trade imbalance despite a free trade agreement.
Overview
The European Union plans to engage with Vietnam on Friday to address persistent administrative barriers hindering EU exports. This move comes as the EU’s trade deficit with Vietnam continues to expand, reaching approximately $50 billion in 2022 and accelerating in the first half of 2023. Despite a free trade agreement (FTA) signed in 2019, which has made Vietnam the EU’s largest southeast Asian trading partner, significant imbalances remain.
The Growing Trade Imbalance
Bilateral trade between the EU and Vietnam reached €67 billion ($79 billion) in 2022, a substantial increase as the implementation of the EU-Vietnam Free Trade Agreement (EVFTA) in 2020. Though, this growth has not been equitable. the EU’s trade deficit with Vietnam rose nearly 20% in 2022 to approximately $50 billion. This trend continued into 2023, with the deficit reaching nearly $30 billion in the first half of the year and accelerating in July.
The imbalance is attributed to non-tariff barriers - administrative obstacles and regulations – that restrict EU exports to Vietnam.Thes barriers impact a wide range of products,preventing them from accessing the Vietnamese market despite the tariff reductions offered by the EVFTA.
| Year | Bilateral Trade (EUR Billion) | EU Trade Deficit (USD Billion) |
|---|---|---|
| 2021 | 58.3 | ~25 |
| 2022 | 67 | ~50 |
| 2023 (H1) | ~35 | ~30 |
Source: European Commission data,estimates based on available reports.
Key Issues to be Discussed
EU Trade Commissioner Maros Sefcovic will lead the discussions with Vietnamese officials. The primary focus will be on removing non-tariff barriers affecting EU products in sectors such as:
- Food and Beverages: Restrictions on products like apples, kiwis (from Italy), and poultry