In Vietnam’s capital Hanoi alone, there are 7.8 million inhabitants who increasingly have money to spend and require new, green solutions.

Photo: Colourbox
27-06-19 DI Business News

EU signs new trade deal with Vietnam

There are nearly 100 million people living in Vietnam, and they have more and more money to spend. EU has just signed a new trade deal with the country, giving Danish companies better access to the enormous market – and attractive opportunities to move production from China to Vietnam.

Fur, pharmaceuticals, machines and fish.

These are just some of the products that over 500 Danish companies today export to Vietnam. Exports currently amount to approx. DKK 3.5 billion, but a new trade agreement between the EU and Vietnam means that exports are expected to grow by around 18 per cent.

“Vietnam is an important market for Danish companies. Both as a manufacturing country, but also in terms of exports to Vietnam’s almost 100 million inhabitants, who are enjoying increasing purchasing power. The trade deal between the EU and Vietnam creates new opportunities for Danish companies and makes it more attractive to move production from China to Vietnam to avoid American tariffs, for example,” says Director at DI Peter Thagesen.

He therefore welcomes the deal as another important part of the EU’s strategy to strengthen trade between Europe and Asia.

See also: New figures: European slowdown sidesteps Denmark

Good for us - historic for Vietnam

“The current EU Commission has signed important trade agreements with countries such as Japan and Singapore, which have paved the way for Danish companies seeking to expand in Asia. That potential has now become even greater. Meanwhile, it also serves to underline the advantages of an EU membership for a small, open economy such as Denmark’s,” says Peter Thagesen.

Meanwhile, it isn’t just EU countries like Denmark who benefit from the agreement. The biggest winner is probably Vietnam, for whom the deal is a historic step – in a green direction.

“The deal also helps pull Vietnam in the right direction when it comes to both the environment and labour rights. Vietnam has agreed to include references to the Paris Agreement and international labour rights agreements from the ILO in the trade deal. This is a historic step for a developing country like Vietnam, and Danish companies have the chance to play an important role in the country’s green development projects,” says Peter Thagesen.

The EU is regularly in negotiation with countries regarding simpler and better trade conditions - currently with Australia, New Zealand and a number of Latin American countries.

See also: Danish companies facing pressure from China

FACTS

The most important Danish exports to Vietnam in 2018

1. Skins and furs (mink furs) DKK 518m

2. Medicinal and pharmaceutical products DKK 301m

3. Machines and equipment for industry DKK 258m

4. Fish, shellfish, molluscs and derived products DKK 205m

5. Special equipment for various industries DKK 119m

Source: Statistics Denmark

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Written by:

Karen Witt Olsen