Bilateral trade between Vietnam and Italy has grown thanks to positive effects of the EU-Vietnam Free Trade Agreement (EVFTA). The trade deal brings many opportunities for increased presence of Vietnamese products in the Italian market.

EVFTA benefits

The Vietnamese Embassy in Italy recently introduced Vietnamese farm products at an exhibition in the region of Emilia Romagna in the north of Italy. The products included dragon fruit, pomelo and mangosteen among other fruit types, spices and processed food. The event was a positive signal for both sides, since Vietnam and Italy are two among the world’s most attractive countries for food lovers to visit.

In 2022, thanks to positive effects of the EVFTA, the bilateral trade value between Vietnam and Italy reached more than US$6.2 billion despite COVID-19, an increase of 11 percent compared with 2021. Also in 2022, Italian groups and firms invested US$412.19 million in Vietnam through 135 projects, affirming Italy’s position among the top 10 EU countries investing in Vietnam.

Currently, major Vietnamese exports to Italy include machinery, equipment, phones, components, computers, transport means and spare parts, iron and steel, coffee, textiles, garments, and seafood. Vietnam imports machinery and mechanical equipment, plastics and plastic products, pharmaceuticals, furniture, textiles and garment accessories, beverage, alcohol and vinegar from Italy. Vietnam has competitive advantages in exporting products such as cashew, coffee, pepper, phones and components, and footwear. Vietnam also has the potential to increase the presence of seafood, vegetables, fruit, cinnamon, star anise, textiles and garments in the Italian market.

Targeting US$7 billion in bilateral trade

At a recent seminar held by the Italian Embassy in Hanoi to discuss the role of research and industrial policies in EVFTA implementation, participants shared the opinion that Vietnamese businesses have benefited from tariff preferences under the trade deal. The EVFTA has also helped domestic companies attract more orders, thus increasing their revenue and profit.

Seminar participants believe the EVFTA will benefit the agricultural, industrial and service sectors of both countries. Italian businesses have major advantages when investing in Vietnam.

However, seminar participants said Vietnam should accelerate comprehensive economic and institutional reforms in order to increase productivity and facilitate the abidance by agreements on non-tariff measures through research, creative innovation and industrial development policies. In the long term, support policies are needed to develop and bring into play the advantages of key industries in accordance with FTA commitments.

At the fifth political consultation between the Vietnamese and Italian foreign ministries, which was held to discuss ways to promote the bilateral strategic partnership, Vietnamese Deputy Minister of Foreign Affairs Le Thi Thu Hang and Italian Undersecretary for Foreign Affairs and International Cooperation Maria Tripodi discussed the prospects of socioeconomic recovery and the potential of bilateral relations. The two sides agreed to coordinate for effective implementation of the EVFTA towards a bilateral trade goal of US$7 billion set by the two Prime Ministers during their meeting last December.

Vietnam has asked Italy to soon ratify the EU-Vietnam Investment Protection Agreement (EVIPA) and support the European Commission in removing the yellow card on Vietnamese seafood exports for illegal, unreported and unregulated (IUU) fishing. Undersecretary Tripodi affirmed the Italian Government’s willingness to accelerate the completion of domestic procedures for EVIPA ratification and to encourage Italian investment in Vietnam in fields where the two sides have advantages. Tripodi expressed her hope that the two sides will convene a meeting of the joint committee for economic cooperation in 2023, and continue to provide development credit for Vietnam in water resource management and sustainable regional development.

Italy is currently Vietnam’s fourth largest trading partner in the EU, after the Netherlands, Germany and France. Meanwhile, Vietnam is Italy’s top trading partner in ASEAN, with annual bilateral trade value increasingly growing.

Source: Vietnam Economic News