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Quality key to EU market access
In light of the EU's decision to lift anti-dumping duty imposed on Viet Nam's bicycle exports to the EU, Viet Nam News reporter Mai Huong interviewed Matthias Duehn, the executive director of European Chamber of Commerce (Eurocham) in Viet Nam, about developments in bilateral trade.
What is your assessment of the development of Viet Nam-EU trade relations?
EuroCham believes Viet Nam-EU trade relations are developing very well. For 2009, the EU has again been Viet Nam's 2nd largest export market, with 20.4 per cent of all Viet Nam exports going to the EU markets, including many commodities such as garments, textiles, footwear and seafood.
Even though the requirements and standards of the EU markets are quite high, Viet Nam's export turnover to the EU market reached 7.7 billion euros (US$9.79 billion) in 2009, thereby tripling the 2.3 billion euros ($2.9 billion) number for 2003.
We believe that this year, 2010, will be particularly promising for Vietnamese exports as the world's economy is getting back on track. We note that whilst exports to the EU are continuously increasing, they could even increase at a faster rate in case Viet Nam would conclude a Free Trade Agreement (FTA) with the EU.
EuroCham, therefore, strongly encourages the government to get into intensive talks about implementing such FTA between the EU and Viet Nam. EuroCham is happy to support, together with the EU Delegation to Viet Nam, any such upcoming FTA negotiations.
How do you evaluate the competitiveness of Vietnamese products in the EU market?
EuroCham believes that the increase in exports to the EU testifies to the rising competitiveness of Vietnamese products. However, Vietnamese companies with an export focus can still improve in some areas.
First, Vietnamese companies must become more aware and knowledgeable about foreign markets, rules and customers, and be flexible if demands regarding their products change. Second, after-sales service and customer care. Unfortunately, many Vietnamese exporters still consider cheap price as the key factor why customers chose a particular product.
Third, Vietnamese export companies have to continue upgrading the quality of their products, introduce new products (Product innovation) and making high-class value-added products that meet international standards.
Again, some Vietnamese exporters often compete with others mainly in price, but pay less attention to quality and standards. We note that former developing countries such as Korea, Singapore, Malaysia and Thailand have been successful mainly because they have shifted their industries towards high-value and value-added goods export, such as electronic and semi-conductor products.
There is an opinion that it would not be difficult for Vietnamese businesses to comply with EU technical regulations. What do you think of such idea?
EuroCham agrees. The Vietnamese enterprises and business associations, which we have worked with, have confirmed that there are no significant problems in meeting EU technical regulations and standards once they are aware that certain standards exist.
Rather, their main issue is knowing precisely the features of technical standards imposed. Knowing the exact rules and regulations that apply is often an issue, particularly for SMEs. From a product-related point of view, in some cases Vietnamese products do not match the actual needs of European consumers.
The obstacle in such case is not an obstacle or a barrier, but rather lacking interest of the European consumers and customers. Sometimes it is a problem of low quality and insufficient technology.
The risk is that European consumers often confuse Vietnamese and Chinese products. We note that probably Viet Nam's most important competitor in the EU is China, which exports products in the same sectors as Viet Nam, mainly footwear and garments, but even electronics.
The main challenge for Vietnamese companies is to differentiate its export strategy from that of China and try to raise the awareness among European consumers that Vietnamese products are different from Chinese ones.
The EU has just decided to lift anti-dumping duty imposed on Viet Nam's bicycle exports to the EU. Do you think that a similar decision will be extended to Viet Nam's shoes?
With regards to anti-dumping duties, EuroCham believes that the practical implications are rather low. For example, the recent anti-dumping duty on bicycles is going to expire because the European industry did not ask the EU Commission to continue its application.
For the anti-dumping duty on footwear we have to wait until the end of the year to know whether the EU industry will ask to the Commission to start an investigation for keeping them. EuroCham hopes that similar to bicycles, the anti-dumping duty on footwear will be repealed at the end of the Commission's investigation.
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