TABLE OF CONTENTS
TABLE OF CONTENTS.........................................................................................1
INTRODUCTION..................................................................................................12
THEORETICAL FRAMEWORK........................................................................13
1.1EXPORTING

AND

THEORIES

OF

INTERNATIONAL

TRADE

l.l.lDefinition of exporting......................................................................................13
1.1.2Theories of international trade......................................................................13
1.2THE VITAL ROLE OF EXPORTING...........................................................16
1.2.1To the country.................................................................................................16
1.2.2To the Company...............................................................................................17
1.3METHODS OF PROMOTING EXPORT......................................................18
1.2.1Subsidies...........................................................................................................18
1.2.2Export financing...............................................................................................19
1.2.3Special government agencies............................................................................19
REAL SITUATION OF VIETNAM’S EXPORTS TO THE EU......................20
2.1 ESTABLISHMENT AND DEVELOPMENT OF THE EUROPEAN UNION 20
2.3REAL SITUATION OF SOME MAIN EXPORT ITERMS TO THE EU 2.3.1
Textile fabric goods..................................................................................................25
2.3.2Footwear...........................................................................................................26

- 1 -


CHAPTER 2: REAL SITUATION OF VIETNAM’S EXPORTS TO THE EU

15

2.3.3Art and handicraft.............................................................................................27
2.2.4Seafood and aquatic products...........................................................................28
2.4SOME ACHIEVEMENTS AND CHALLENGES OF VIETNAM’S EXPORTS
TO THE EU..............................................................................................................28
2.4.1Achievements...................................................................................................29
2.4.2Disadvantages...................................................................................................29
RECOMMENDATIONS TO FURTHER PROMOTE VIETNAM..................30
EXPORT TO THE EU MARKET........................................................................31
3.1RECOMMENDATIONS TO VIETNAM ENTERPRISES................................31
3.1.1To select the suitable method to actively penetrate into the distribution
channels in EU market..............................................................................................31
3.1.2To reinforce investment activities and perfect management of work to produce
goods suitable with EU market.................................................................................31
3.1.3To set up applying e-commerce in business.....................................................32
3.1.4To improve the operating capacity and competitiveness with their rivals to
produce the suitable products with EU market.........................................................32
3.2RECOMENTDATIONS TO THE GOVERNMENT..........................................33

-2 -


3.2.1To construct and perfect economic and commercial policies to promote export.
..................................................................................................................................33

3.2.3To restructure the state-owned enterprises.......................................................35
3.2.4To support credits for the export enterprises....................................................35
3.2.5To innovate administrative machinery and import-export mechanics.............35
3.2.6Other recommendations....................................................................................36
CONCLUSION.......................................................................................................37
REFERENCES.......................................................................................................37
I.Book.......................................................................................................................37
II.Journal article........................................................................................................38
III.Web document.....................................................................................................38
1.3.1
2.1 ESTABLISHMENT AND DEVELOPMENT OF THE EUROPEAN
UNION .... 15
TABLE OF CONTENTS.........................................................................................1
INTRODUCTION..................................................................................................12
THEORETICAL FRAMEWORK........................................................................13
1.1EXPORTING

AND

THEORIES

OF

INTERNATIONAL

TRADE

l.l.lDefinition of exporting......................................................................................13
1.1.2Theories of international trade......................................................................13


- 3-


CHAPTER 2: REAL SITUATION OF VIETNAM’S EXPORTS TO THE EU

15

1.2THE VITAL ROLE OF EXPORTING...........................................................16
1.2.1To the country.................................................................................................16
1.2.2To the Company...............................................................................................17
1.3METHODS OF PROMOTING EXPORT......................................................18
1.2.1Subsidies...........................................................................................................18
1.2.2Export financing...............................................................................................19
1.2.3Special government agencies............................................................................19
REAL SITUATION OF VIETNAM’S EXPORTS TO THE EU......................20
2.1 ESTABLISHMENT AND DEVELOPMENT OF THE EUROPEAN UNION 20
2.3REAL SITUATION OF SOME MAIN EXPORT ITERMS TO THE EU 2.3.1
Textile fabric goods..................................................................................................25
2.3.2Footwear...........................................................................................................26
2.3.3Art and handicraft.............................................................................................27
2.2.4Seafood and aquatic products...........................................................................28
2.4SOME ACHIEVEMENTS AND CHALLENGES OF VIETNAM’S EXPORTS
TO THE EU..............................................................................................................28
2.4.1Achievements...................................................................................................29

-4 -


2.4.2Disadvantages...................................................................................................29
RECOMMENDATIONS TO FURTHER PROMOTE VIETNAM..................30

EXPORT TO THE EU MARKET........................................................................31
3.1RECOMMENDATIONS TO VIETNAM ENTERPRISES................................31
3.1.1To select the suitable method to actively penetrate into the distribution
channels in EU market..............................................................................................31
3.1.2To reinforce investment activities and perfect management of work to produce
goods suitable with EU market.................................................................................31
3.1.3To set up applying e-commerce in business.....................................................32
3.1.4To improve the operating capacity and competitiveness with their rivals to
produce the suitable products with EU market.........................................................32
3.2RECOMENTDATIONS TO THE GOVERNMENT..........................................33
3.2.1To construct and perfect economic and commercial policies to promote export.
..................................................................................................................................33
3.2.3To restructure the state-owned enterprises.......................................................35
3.2.4To support credits for the export enterprises....................................................35
3.2.5To innovate administrative machinery and import-export mechanics.............35

- 5-


CHAPTER 2: REAL SITUATION OF VIETNAM’S EXPORTS TO THE EU

15

3.2.6Other recommendations....................................................................................36
CONCLUSION.......................................................................................................37
REFERENCES.......................................................................................................37
I.Book.......................................................................................................................37
II.Journal article........................................................................................................38
III.Web document.....................................................................................................38
3.1


3.2.1 To construct and perfect economic and commercial policies to promote

-6 -


28

export

3.2.2 To restructure the economy, schedule production operations forward
TABLE OF CONTENTS.........................................................................................1
INTRODUCTION..................................................................................................12
THEORETICAL FRAMEWORK........................................................................13
1.1EXPORTING

AND

THEORIES

OF

INTERNATIONAL

TRADE

l.l.lDefinition of exporting......................................................................................13
1.1.2Theories of international trade......................................................................13
1.2THE VITAL ROLE OF EXPORTING...........................................................16
1.2.1To the country.................................................................................................16

1.2.2To the Company...............................................................................................17
1.3METHODS OF PROMOTING EXPORT......................................................18
1.2.1Subsidies...........................................................................................................18
1.2.2Export financing...............................................................................................19
1.2.3Special government agencies...........................................................................19
REAL SITUATION OF VIETNAM’S EXPORTS TO THE EU......................20
2.1 ESTABLISHMENT AND DEVELOPMENT OF THE EUROPEAN UNION 20
2.3REAL SITUATION OF SOME MAIN EXPORT ITERMS TO THE EU 2.3.1
Textile fabric goods..................................................................................................25
2.3.2Footwear...........................................................................................................26
2.3.3Art and handicraft.............................................................................................27
- 72.2.4Seafood and aquatic products...........................................................................28


2.4SOME ACHIEVEMENTS AND CHALLENGES OF VIETNAM’S EXPORTS
CHAPTER 2: REAL SITUATION OF VIETNAM’S EXPORTS TO THE EU

15

TO THE EU..............................................................................................................28
2.4.1Achievements...................................................................................................29
2.4.2Disadvantages...................................................................................................29
RECOMMENDATIONS TO FURTHER PROMOTE VIETNAM..................30
EXPORT TO THE EU MARKET........................................................................31
3.1RECOMMENDATIONS TO VIETNAM ENTERPRISES................................31
3.1.1To select the suitable method to actively penetrate into the distribution
channels in EU market..............................................................................................31
3.1.2To reinforce investment activities and perfect management of work to produce
goods suitable with EU market.................................................................................31
3.1.3To set up applying e-commerce in business.....................................................32

3.1.4To improve the operating capacity and competitiveness with their rivals to
produce the suitable products with EU market.........................................................32
3.2RECOMENTDATIONS TO THE GOVERNMENT.........................................33
3.2.1To construct and perfect economic and commercial policies to promote export.
..................................................................................................................................33
3.2.3To restructure the state-owned enterprises.......................................................35
3.2.4To support credits for the export enterprises....................................................35
-8 -

3.2.5To innovate administrative machinery and import-export mechanics.............35


3.2.6Other recommendations....................................................................................36
CONCLUSION.......................................................................................................37
REFERENCES.......................................................................................................37
I.Book.......................................................................................................................37
II.Journal article........................................................................................................38
III.Web document.....................................................................................................38

- 9-


LIST OF ABBREVIATIONS
EU: European Union
CESC: Community of European Steel and Coal
EEC: European Economic Community
CEEA: Community of European Energy Atomic
EC: European Community
USD: United States Dollar
US: The United States

WTO: Word Trade Organization
GDP: Gross Domestic Product
ISO: International Organization for Standardization

- 10 -


LIST OF TABLES
Table
1
Table
2

: Vietnam - EU import and export turnover
: Vietnam - EU export turnover....
: Vietnam - EU turnover..........

Table
3

- 11-


INTRODUCTION

2005 marked the 15th anniversary of diplomatic relations between the European
Community (EC) and Vietnam. Diplomatic ties were established in October 1990. The
Delegation of the European Commission to Vietnam was officially opened in 1996
The EU is one of Vietnam's largest trading partners and export markets. EU
companies have also invested considerably in Vietnam, bringing stocks of EU FDI to

USD 4 billion, which makes the EU the second largest source of FDI into Vietnam.
* Objectives of the report
First, I would like to give out of brief a theoretical framework about exporting and
international trade. Then, in the next part, I will review and analyses the real situation of
Vietnam export to the EU. Finally, I would like to give some recommendations of my
own, in the last, to enhance export activity of Vietnam enterprises in the time to come.
* Scope of report
Due to the limited time and knowledge, my research can not cover all the export - import
activities of Vietnam enterprises but it only focuses on the Vietnam enterprises’ export
activity. Some recommendations are to the Vietnam enterprises and State only.
* Methodology of the report is a combination of
Method of statistics
Method of analysis
Method of
comparison Method
of synthesis
* Outline of the report
Apart from an Introduction and Conclusion, the report consists of three chapters:
Chapter 1 : Theoretical framework
Chapter 2: Real situation of Vietnam’s exports to EU

CHAPTER 1
Chapter 3: Recommendations to strengthen Vietnam export activities in EU market.

-12-


THEORETICAL FRAMEWORK

International trade has occurred for thousands of year and there have been a

numbers of theories discussing the reasons why countries take part in the international
trade and what gains and benefits counties have from international trade. As this report
focuses on the exporting activity of the Hung Thinh Company, exporting and theories of
international trade will be discussed in the following part of the chapter.
1.1 EXPORTING AND THEORIES OF INTERNATIONAL TRADE l.l.lDefinition of
exporting

“Exporting is the act of sending goods and services from one nation to others”.
Relatively, exports would be defined as” all goods and services sent from one country to
other nation” . Companies export products when the international market place offers
opportunities to increase sales and in turn profits. Those companies may be small,
medium-size or large multination firms, but they all engage in exporting. However, not
all companies get involved in export activities to the same extend. Some companies
perform few or none of necessary activities to get their product a market abroad. Instead,
they use intermediaries that specialize in getting products from one market to another.
Other companies perform all of their activities themselves with an infrastructure that
bridges the gap between two markets.
1.1.2 Theories of international trade

To understand the nature of exporting, how it is based on related economic factors
and what the gains from exporting are. The theories of international trade are studied
below:
1.1.2.1 Absolute advantage
Scottish economist Adam Smith (1776) first put the trade theory of absolute
advantage as follow:” Absolute advantage is the ability of a nation to produce a good
more efficiently than any other nation”. In other words, a nation with an absolute
advantage can produce greater output of a good or service than other nations using the
same amount of, or fewer, resources. Therefore, a country could concentrates on
producing the goods in which it holds an absolute advantage. It could then trade with
- 13-



other nations to obtain the goods it needed but did not produce.
And despite the power of the theory of absolute advantage in showing the gains
from trade, there is one potential problem. What happens if one country does not hold an
absolute advantage in the production of any products? Are there still benefits to trade, and
will trade event occur? To answer these questions, let’s take a look at an extension of
absolute advantage, the theory of comparative advantage.
1.1.2.2 Comparative advantage
An English economist name David Ricardo developed the theory of comparative
advantage in 1817. He proposed that if one country (in the example listed here of twocountry world) held absolute advantage in the production of products, specialization and
trade could still benefit both countries. A country has a comparative advantage when it is
unable to produce a good more efficiently than other nations, but produces the goods
more efficiently than it does any other goods. In other words, trade will be beneficial
even if one country is less efficient in the production of two goods, so long as it is less
inefficient in the production of one of goods.
And economic researchers continue to develop and new theories to explain the
international purchase and sale of products. Let’s now examine one of these, the theory of
factor proportions.
1.1.2.3 Factor proportions theory
In the early 1990s, an international trade theory emerged that focused attention on
the proportion (supply) of resources in a nation. The cost of any resource is simply the
result of supply and demand: Factor in great supply relative to demand will be less costly
than factors in short supply relative to demand. Factors proportion theory states that
countries produce and export goods that require resources in short supply. The theory
resulted from research of two economists, Elle Heckscher and Bertil Olin, and is
therefore sometimes called the Heckscher-Ohlin theory.
Thus factor proportions theory differs considerably the theory of comparative
advantage. Recall that the theory of comparative advantage states that countries
specialize in producing the good that it can produce more efficiently than any other good.

Thus the focus of the theory (and absolute advantage as well) is on the productivity of the
production process for a particular good. In contract, factor proportions theory says that a
-14-


country specializes in producing and exporting goods using the factors of production that
are the most abundant, and thus cheapest - not the goods in which it is most productive.
1.1.2.4 National competitive advantage
In 1990, a new theory was put forth by Michael Porter to explain why certain
countries are leaders in the production of certain products. His national advantage theory
states that a nation’s competitiveness in an industry depends on the capacity of the
industry to innovate and upgrade. Porter’s work incorporates certain elements of previous
trade theories but also makes some important new discoveries.
Porter is not preoccupied the export and import patterns of nations, but with explaining
why some nations are more competitive in certain industries. He identifies four elements:
. Factor condition
. Demand conditions
. Related and supporting industries
. Firm strategy, structure and rivalry
1.1.2.5 International product life cycle
Raymond Vernon’s international product life cycle states that a company will
begin by exporting its product and later undertake foreign direct investment as the
product move through its life cycle (from new to maturing standardized product) to
determine where it will be produced.
In the new product stage, stage 1, the high purchasing power and demand of buyer
in an industrialized country spur a company to design and introduce a new product
concept. Because the exact level of demand in the domestic market is highly uncertain at
this point, the company keeps production volume low and based in home country.
Keeping production where initial research and development occurred and staying in


- 15-


contact with customers allows managers to monitor buyer preferences and modify
the product as needed. Although initially there is virtually no export market, exports do
begin to pickup late in the new products stage.
In the maturing produce stage, stage 2, the domestic market and markets abroad
become fully aware of the existence of the product and its benefits. Demand rises and is
sustained over a fairy lengthy period of time. As exports begin to account for an
increasing greater share of total product sales, the innovating company introduction
facilities in those countries with the highest demand. Near the end of the maturity stage,
the product begins generating sales in developing nations and perhaps some
manufacturing presence is established there.
In standardized product stage, stage 3, competition from other companies selling
similar products pressure companies to lower price in order to maintain sales levels. As
the market becomes more prices sensitive, the company begins searching aggressively for
low-cost production based in developing nations to supply a growing worldwide market.
Furthermore, as
most production now takes place outside innovating country; demand in the innovating
country is supplied with imports from production in developing and other industrialized
nations. Late in this stage, domestic production might even cease altogether.
From these theories, the core necessity of exporting can be drawn out. As for
Vietnam enterprises, the products, which combined absolute advantage and national
competitive advantage, are what they aim at. And by considering the product life cycle
theory, domestic companies will find suitable product strategy for each kind of their
products.
1.2

THE VITAL ROLE OF EXPORTING


1.2.1 To the country

So as to understand why a country exports, let’s have look at the international
trade and the importance of international trade. It is defined as the purchase, sale or
exchange of goods and services across national borders. This is in contrast to domestic
trade, which occurs between different stage, regions, or cities within a country. And as
being stated,

- 16-


regions, or cities within a country. Exporting, therefore, can be called a core function of
international trade, which brings benefits to a country as follows:
Firstly, exporting, in company with importing, provides a country’s people with a
great choice of goods and services. For example, because Finland has a cool climate, it
can not be expected to grown cotton. But it can sell paper and other products made from
lumber (which it has abundance) to the US. It can then use the proceeds from sales to buy
Pima cotton from the US. Thus, people in Finland get cotton they would otherwise not
have. Although the US has vast forests, the wood-based products from Finland might be
of certain quality or price that fills a gap in the US marketplace. Importing these products
from Finland might also allow workers in the US to work in other industries that pay
higher wages.
Secondly, exporting is an important engine for job creation in many countries. For
example, the Department of Commerce of the US estimated that for every $1 billion
increase in exports between 1993 and 1997 created more than 6,5 million jobs in the US.
More over, the US Trade Representative’s office report that trade-related jobs pay 13
percent to 17 percent more than jobs not related to international trade.
1.2.2 To the Company

As the matter of fact, companies are now increasingly selling goods and services

to wholesalers, retailers, industry buyers and customers in other nations. Generally
speaking, there are three main reasons why companies export
1.2.2.1 Expand sales
Companies that have a certain status in the domestic marketplace tend to export as
a means of expanding total sales when the domestic activities, certainly not all for going
international must take into account many factors like: Political environment or culture,
etc. Greater sales volume allows them to spread the fixed costs of production over a
greater number of manufactured products, thereby lowering the cost of production each
unit of output. In short, exporting is one way of to archive economies of sale.
1.2.2.2 Excess production capacity
Sometimes companies produce more goods and services than the market can
absorb. When that happens, resource sit idle. But the firm can find new international
resources of demand; it can spread its cost over grated number of units produced, so that
- 17 -


can lower the cost per unit and increase profits.
If it passes on these benefits to customers in the form of lower prices, the firms
might also capture market share from competitors. A dominant market position means
greater market power, providing the firm with greater leverage in negotiating with both
suppliers and buyers.
1.2.2.3 Diversify sales
Exporting permits companies to diversify their sales. In other words, they can
offset slow sales in one national market (perhaps due to recession) with increased sales in
other. Diversified sales can level off a company’s cash flow-marking it easier to
coordinate payments to creditors with receipts from customers.
1.2.2.4 Gain experience
Companies often use exporting as a low-cost, low-risk way of getting started
international business. For example, owners and managers of small companies, which
typically have little or no knowledge of how to conduct business in other cultures, use

exporting to gain valuable international experience.
1.3 METHODS OF PROMOTING EXPORT

Countries often in trade by strongly supporting their domestics companies
exporting activities though they all know that it brings both pros and cons. There are
three most common instruments that governments use to promote export:
1.2.1

Subsidies
Financial assistance to domestics produces in the form of cash payments, low

interest loan, tax breaks, product price supports, or some other forms is called subsidy.
Regardless of the form a subsidy takes, it is intended to assist domestic companies in
fending off international competitors. This can mean become more competitive in the
home market or increasingly competitive in international markets through export.

- 18-


Because of many forms a subsidy can take, it is possible to calculate the amount
of subsidies any country offers its producers. One of the most popular forms in the world
today is a media and entertainment, especially in developed countries. In Vietnam, this
type of subsidy only appears in tourism sector.
Nevertheless, when offering subsidies, governments should pay more attention to
arguments over unfair subsidies settled by WTO. Critics charge that subsidies cover cost
that truly competitive industries should be able to absorb on their own. In this sense,
subsidies simply encourage inefficiency and complacency. Because government
generally pay for subsidies founds obtained from income and sales taxes, it is widely
believed that subsidies benefits companies and industries that received them but harm
consumers.

1.2.2

Export financing

Government often promotes exports by helping companies finance their export
activities. They can offer loans that company could otherwise not obtain or charge them
an interest rate that is lower than the market rate. Or the government can guarantee that it
will replay the loan if a company should default on the repayment-called loan guarantee.
However, receiving financing from government agencies is often crucial to the success of
small businesses just beginning export. Export financing programs are not immune to
controversy. Few criticize government support of small business exporting activities. But
support for large Multinational Corporation is often controversial.
1.2.3

Special government agencies.

The government of the most nations has special agencies responsible for
promoting exports. Such agencies can be particularly helpful in obtaining contracts or
small and midsize businesses that have limited financial resources. Government tradepromotion agencies also often organize trips for trade officials and business people to
visit other countries to meet potential business partners and generate contracts for new
business. They also typically trade officers in other countries. These officers are to
promote the home country’s export and introduce business to potential partners in the
host nation. Government trade promotion agencies typically do a great deal of advertising
in the other countries promote the nation’s export.
The above trade theories have given an overview of what exporting is, its

- 19-


rationales, and what gains that a company can benefit from talking export activities. From

these theories, Vietnamese companies may draw out an exporting pattern in which they
can take use of the countries international advantages for achieve high manufacturing and
trading productivity.

CHAPTER 2
REAL SITUATION OF VIETNAM’S EXPORTS TO THE EU
2.1 ESTABLISHMENT AND DEVELOPMENT OF THE EUROPEAN UNION
The European Union (EU) now consists of 15 member countries, including France,
Germany, Italy, Belgium, Holland, Luxembourg England, Ireland, Denmark, Greece,
Spain, Portugal, Austria, Swede, and Finland. The EU total area is of 3.3 million square
kilometers, with the population of 400 million, and Gross National Product of USD 8.000
billion. The head office is located in Bruxelles (the capital of Belgium). EU is managed
by a range of general Institutions (including European Parliament, Assembly, and
Committee...)
The foundation process of EU was marked on 04/18/1951 when Belgium, France,
Italy, Holland, Luxemburg and Federal Republic of Germany (Western Germany) jointly
signed Paris Treaty, establishing a Community of European Steel and Coal (CESC) in
order to form a common market for a coal, steel and iron ore products. Next, all member
countries of CESC signed Roma Agreement on 07/25/1957 setting up an European
Economic Commodity (EEC), which aimed to establish a common market of agricultural
and industrial goods. And then they came to form a Community of European Energy
Atomic (CEEA) as to control the use of energy and study of atomic in cooperation. From
the date of January 07, 1976 on hall head offices of the organizations including CESC,
EEC, and CEEA were brought together and called with a common name-European
Community (EC).

- 20-


In December 1991 in Maastricht (Holland), the heads of states of the EC countries

unanimously arrives at a decision of renaming European Community (EC) to European
Union (EU) on 1st December 1992 when European Union Treaty (normally called
Maastricht Treaty) was signed. European Union was officially founded on 10 th
September, 1993.
Regarding the economic alliance, EU countries began out abolishing the control
of capital exchange among its member countries, founded European Monetary Instruction
in 1945, European Central Bank in 1998. Since 1 st January 1999, the Euro has been
officially considered as the common money for 11 countries out of 15 European
members. The European common money (Euro) was formally circulated at the beginning
of 2002, and replaced the stated currency of EU member countries with a view to delete
the monopoly position of the US dollar in the world market. When the opening European
Treaty became effective (on 1 st May 2004), EU became the biggest economic area in the
world with 25 member countries (including 10 new candidates: Spain, the Czech
Republic, Estonia, Hungary, Latvia, Manta, Poland, Slovenia); and the total population of
500 million.
2.2 VIETNAM EXPORT TURNOVER
The EU is now one of the important trading partners of Vietnam. Since 1995
when Vietnam signed the trade cooperation agreement with EU, which opened a new
period of bilateral cooperation relationship, to 1995 Vietnam’s trade surplus has been
increasingly rising (table 2.1)
Table 2.1: VIET NAM - EU IMPORT AND EXPORT TURNOVER (1996-2006)

(Unit: Million USD)
Year

Vietnam to EU export turnover

Cost

1995


Increase rate (%)

695

Import turnover of Vietnam
from EU

Cost

Increase rate (%)

664

Import and export turnover

Cost

Increase rate
(%)

1.359

31

1996

840

20.86


1.142

72

1.892

46

-302

1997

1.583

88.45

1.313

15

2.896

46

270

1998

2.044


29.12

1.255

-4

3.299

14

789

1999

2.474

21.04

-15

3.536

7

1.412

2.849

15.16


19

4.110

3.008

5.58

1.269

3.168

5.32

1.425

2003

3.860

21.84

1.498

2004

4.797

24.27


1.615

2005

5.319

2000
2001
2002

10.88

1.062
1.261

1.825

1

- 21-

12
5

8
13

16


1.588

4.277

4

1.739

4.593

7

1.743

5.358

17

2.362

6.412
7.144

20
11

3.182
3.494



It is clear that the trading scale between the two partners is ceaselessly speeding up.
The annual average commercial growth speed is 29.52% per year, export and import
growth is 41.32% and 29.52% respectively. The real statistics shows that Vietnam
exported commodities have been accepted by EU market and its prospect will be much
brighter.
Vietnam exported to the EU grows both in quantity and quality. The structure of
exports has a significant change and the export turnover quickly increases. According to
the statistics supplied by the Vietnam General Statistics Department, the export turnover
of the country to the EU grows at a relatively high average speed of around 36.32% right
after signing a draft Agreement on cooperation relationship between the two parties
(during 1995-2005).
This result demonstrates the fact that the EU great partner who strongly supports
Vietnam efforts in ameliorating the prolonged trade balance deficit. Vietnam’s exports to
the EU in 2001 accounted for 19.63% of the country’s total export revenue. In addition,
Vietnam-EU exports in the EU total import volume are strongly increasing; it increased
to 41.86% in 1996; 13.02% in 1997; -4.62% in 1998; -8.00% in 1999; 7.85% in 2000;
7.89% in 2001; 3.93% in 2002; 10.83% in 2003; 6.82% in 2004 and 6.03% in 2005.
Table 2.2: VIETNAM - EU EXPORT TURNOVER (1995-2005)
(Unit: Million USD)

- 22-


1995

1996

1997

1998


1999

5.448

7.255

9.185

9.361

664

848
24.9

1.607

2003

2004

2005

16.706

20.149

26.49


32.441

3.002
3.63

3.162
10.03

3.852
17.08

4.968
23.92

5.519
18.35

1.261
7.85

1.269
7.89

1.425
3.3

1.498
10.83

1.615


1.825
6.03

11.6

5.23

5.06

17.91

22.46

2000

2001

2002

11.54

14.48

15.029

2.079

2.515


21.01

1.88

18.88

2.845
20.3

1.142
41.86

1.313
13.02

1.255
-4.62

1.062

21.7

47.23

22.7

17.34

Vietnam's total
export

turnover(l)
Vietnam's export to
the EU turnover(2)

(2)' share of (1):%
The EU total
import
turnover(3)

664

(2)' share of (3):%
Yearly increase of (2):

-8

6.82

9.98

%

Table 2.2 shows that Vietnam-EU export value rises but with unstably speed: in 1996 in creasesed by
21.70% compared with 1995; in 1997 increased by 47.23% over 1996; in 1998 increased by 22.70%
over 1997; in 1999 increased by 17.34% over 1998; in 2000 increased by 11.60% over 1999; in 2001
increased by 5.23% over 2000; 2002 increased by 5.06% over 2001; 2003 increased by 17.91% over
2002; 2004 increased by 22.46% over 2003; however, only by 8.89% in 2005 over 2004. The cause of
this is a hard price reduction of some goods in the world (especially coffee), and all Vietnam key
export commodities are facing some difficulties and barriers caused by the import regulations of the
EU.

Although the EU market has a great annual demand for Vietnam main exported
goods and Vietnam export turnover to the market rapidly grows up, the volume of
Vietnam-EU exports is negligible (0.22%) compared with the total import quantity of
EU. The prior discussible cause of this matter is Vietnam small economic potential,
weak industry development, and poor processing technique; another reason is that EU
partner’s requirements; for example, the exports still contains impurity, the aquatic
processing condition do not meet EU hygienic standards, textile garment goods is
sometimes covered with stains. Besides, in some case, Vietnam export products fail to
guarantee contractual regulations in terms of specifications, quantity and delivery
deadline. Accordingly, the export-import circulation from Vietnam to the EU is
relatively decreased.
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Since 1995, there are fifteen member countries in European Union, and all of
them have trade relationship with Vietnam, however, at different levels. Vietnam has
also fifteen export markets in European Union and the share Vietnam exports to each of
these markets is also various.

Table 2.3: VIETNAM - EU EXPORT TURNOVER (1995-2005) (Country-division, Unit:
Million USD)
Country

1995

Demark

1996

1997


1998

1999

18.5

32.2

43.3

43.7

Iceland
England

125.1

256.2

335.8

421.2

Finland
Sweden

4.7

31.8


47.1

58.5

54.2

Spain
Austria
Germany
Belgium

144.5

159.4

88.2

17.1

28.3

25.1

754.8

1010.3

1015.8


41.9

57.1

108.5

133.6

49.7

63.3

71.1

12.1

20.8

19.2

479.4

511.6

571.6

22.4

19.9


24.3

55.1

53.2

62.4

90

5.6

10.4

34.3

42

45.4

55.1

237.9

264.6

330.9

369.9


469.7

137.3

158.5

179

234.2

312

410.4

16.3
118.2

80.2

58.4

Greece
49.8

2005

2002

8.9


57.1

2004

2001

Portugal

Italy

2003

2000

218.0

6.2
21.1

28.8

16.2

22.9

27.6

66.4

85.6


9.4

5.6

11.4

8.4

34.9

23.7

28.9

29.7

38.1

59.5

88.9

218.0

228.0

411.4

552.5


654.3

730.3

721.8

729

854.7

1064.7

1086.7

34.7

61.3

124.9

212.3

306.7

311.9

341.2

337.7


391.4

515.7

544.2

8.8

108.0

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Holland

79.7

147.4

France

169.1

145.0

Luxembourg

0.3


0.6

266.8
238.1
1.5

304.1

342.9

391.0

364.5

404.3

493

581.9

659.7

297.3

354.9

380.1

467.5


437.9

496.1

555.1

652.7

3.3

4.2

5.8

7.5

8.3

9.5

2.1

6.6

Based on table 2.3, it is seen that our export turnover to the EU gradually goes up.
The greatest export market of Vietnam to EU block is Germany; it occupied around
24.04% of total Vietnam-Euro export turnover in 2005 followed by England with
17.04%; France (15.57%); Flolland (12.13%); Belgium (11.36%); Italy (7.9%); Spain
(5.3%);...Denmark (1.6%); Finland (0.9%); Egypt (0.47%); Portugal (0.4%); Island
(0.3%) and Luxembourg (0.2%).

2.3 REAL SITUATION OF SOME MAIN EXPORT ITERMS TO THE
EU 2.3.1 Textile fabric goods
Based on export quota, the EU is the biggest textile fabric importer of Vietnam.
Vietnam export for this kind of goods to the EU particularly increases rapidly since
textile and garment trading treaty signed in 1993. For the period of 1993-1995, Vietnam
export to the EU went up to 80%: from 250 to 450 million US dollars; to 765.5 million
US dollars in 1995, then 993.1 million US dollars in 1996; it obtained 1.502.6 million
US dollars in 1997; then 1.450.0 million US dollars in 1998; 1.746.2 million US dollars
in 1999; 1.981.9 million US dollars in 2000; 1.975.4 million US dollars in 2001; 2.732.0
million US dollars in 2002; 3.609.1 million US dollars in 2003; 4.429.8 million US
dollars in 2004 and 4.838.4 million US dollars in 2005 accounting for 32.7% of Vietnam
total export turnover. Jacket commodity covers 51.7% in the structure of Vietnam textile
and garment products exported to the EU; in 2001 18 million jackets were exported
volume in 1993; including shirt (11%), trousers (5%), sweaters and knitted shirt (3.9%),
knitwear (22.7%)...
The Proportion of Vietnam export to EU member countries is 46.9% for
Germany; 10.8% for France; 9.4% for England; 6.1% for Belgium; 5.1% for Spain;
4.1% for Italy; 2.0% for Denmark; 1.9% for Sweden; 1.5% for Australia; 0.65% for
Finland; Island(0.4%); Luxembourg (0.3%); Greece (0.2%); Portugal (0.1%).

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