Exploring Vietnam-EU Trade & EVFTA: How the EU-Vietnam Trade Has Evolved Post-EVFTA

When the EU–Vietnam Free Trade Agreement (EVFTA) came into effect on 1 August 2020, it marked a milestone in Vietnam’s economic integration and one of the most ambitious trade deals the EU has signed with a developing country. Now, five years on, the numbers tell a compelling story: trade has surged, new opportunities have opened, and Vietnam has become one of the EU’s most important trading partners in Southeast Asia. The EU-Vietnam trade increased significantly in 2024, with Vietnam's exports to the EU hitting about $51.7 billion and overall bilateral trade reaching $72.9 billion, as per the latest Vietnam export data and the Europe trade data.  

With a $35 billion trade surplus, Vietnam continued to maintain a significant surplus. The EU-Vietnam Free Trade Agreement (EVFTA), which is currently in its fifth year and has helped industries including electronics, textiles, footwear, agriculture, and fisheries, is largely responsible for this encouraging development. This article provides a detailed examination of how Vietnam–EU trade has evolved following the EVFTA, analyzing the data, sectoral shifts, challenges, and the broader implications for both parties.

Vietnam-EU Bilateral Trade Picture

On June 30, 2019, a trade and investment protection agreement was struck between the European Union and Vietnam. On February 12, 2020, the European Parliament approved both agreements, and on March 30, 2020, the Council signed the Free Trade Agreement. On August 1, 2020, the trade agreement went into effect. Following ratification by every EU member state, the Investment Protection Agreement will come into effect. It was ratified by 18 EU member states as of June 2024.

At over $72 billion in total trade in 2024 (and a $45.9 billion EU deficit), Vietnam is the EU's largest trading partner in ASEAN and its 17th largest trading partner in the EU. The primary items that the EU buys from Vietnam are textiles, footwear, and machinery and appliances, which make up half of all imports. Transport equipment, machinery and appliances, and chemicals are the EU's top exports to Vietnam. Vietnam and the EU maintained a robust investment relationship in 2024, as seen by the flows of FDI and the data on EU trade relations with Vietnam. 

The fact that EU FDI outflows to Vietnam increased somewhat from $1.4 billion in 2023 to $1.51 billion in 2024 shows that EU investors are still interested in the country. With an external stock of $11.66 billion, the EU continued to be a significant investor in Vietnam in terms of FDI stocks.

What Is EVFTA and Why Does It Matter

EVFTA is a “new generation” free trade agreement that goes beyond tariff reductions. It covers:

• Elimination of almost all customs duties over 7 years for Vietnam and 10 years for the EU.

• Access to government procurement, services, and investment markets.

• Strong commitments to labor rights, sustainable development, and environmental standards.

• Protection for geographical indications (GIs), intellectual property, and consumer rights.

The EU eliminated duties on 85.6% of tariff lines immediately, representing about 70% of Vietnam’s exports to the bloc. The rest are being phased out gradually, with nearly 99% of all tariffs eliminated by 2027. Vietnam committed to reducing tariffs on 48.5% of EU imports right away, with nearly all eliminated within 10 years.

This asymmetry reflects Vietnam’s status as a developing economy, but both sides benefit. For Vietnam, the EU is a high-value market with strict quality standards. For the EU, Vietnam offers a fast-growing, 100-million-strong consumer base and a strategic manufacturing hub.

Exploring Vietnam-EU Trade Data in the Last 10 Years

Vietnam’s Trade With EU Members: Vietnam’s Top Trade Partners in the EU

Vietnam's trade relations with EU members have seen significant growth over the past years. The European Union is one of Vietnam's largest trading partners, with bilateral trade reaching billions of dollars annually. The comprehensive partnership between Vietnam and the EU has led to the removal of trade barriers and enhanced cooperation in various sectors, benefiting both sides. Germany is the biggest import partner of Vietnam, as per the data on Vietnam imports from Germany. The Netherlands is Vietnam’s largest export partner, as per the data on Vietnam exports to Netherlands. The top trade partners of Vietnam, or the leading Vietnam trade partners in the EU, as per the Vietnam shipment data and the EU-Vietnam trade data for 2024-25, include: 

EU-Vietnam Trade Growth Since EVFTA

Before EVFTA (2015–2019):

• Vietnam–EU trade averaged US$44 billion annually.

• Exports from Vietnam to the EU stood at around US$31 billion per year.

• Imports from the EU hovered near US$14 billion.

Post-EVFTA (2020–2024):

• Bilateral trade reached US$64.6 billion annually, a 46.5% increase over the pre-EVFTA baseline.

• Vietnam’s exports to the EU surged to US$48.7 billion, growing by more than 56%.

• Imports from the EU rose modestly to US$15.9 billion, about 13% higher than before EVFTA.

• Between August 2020 and May 2025, total two-way trade amounted to nearly US$300 billion.

The clear takeaway: EVFTA significantly boosted Vietnamese exports, while imports from the EU grew more moderately. Vietnam’s trade surplus with the EU has widened considerably.

Sectoral Shifts in Trade

The EVFTA has reshaped trade patterns across multiple sectors. Some industries have thrived, while others face challenges.

Sectors with Strong Export Gains

1. Coffee

• Exports to the EU doubled, climbing from about US$983 million in 2020 to US$2.2 billion in 2024.

• Tariff reductions and EU demand for high-quality, traceable coffee boosted Vietnam’s position as the world’s second-largest coffee exporter.

2. Fruit and Vegetables

• Shipments rose from US$146 million to US$242 million between 2020 and 2024.

• Improved logistics and compliance with EU sanitary and phytosanitary (SPS) standards enabled Vietnam to diversify beyond traditional staples like dragon fruit into mangoes, lychees, and passionfruit.

3. Footwear

• Exports grew from US$3.7 billion to US$5.65 billion, a gain of 52%.

• The EU is now Vietnam’s second-largest footwear market after the U.S.

4. Textiles and Apparel

• Though global demand fluctuated, exports to the EU rose strongly after tariff cuts, with Vietnamese garments becoming more competitive against rivals from Bangladesh and China.

5. Wood and Wood Products

• Significant increases came as Vietnamese producers tapped into EU demand for sustainable, certified wood products.

6. Aquatic Products

• Despite stricter EU regulations, Vietnamese shrimp and pangasius exports gained traction thanks to reduced tariffs and investments in processing quality.

Sectors Facing Difficulties

1. Seafood

• Export values dropped by around 30% in 2023, due to rising EU quality and sustainability requirements.

• The EU’s “yellow card” warning over illegal, unreported, and unregulated (IUU) fishing remains a hurdle.

2. Pepper and Rubber

• Both sectors recorded declines of over 25%, largely because of falling global prices and tough EU technical standards.

3. Textiles and Footwear in 2023

• Despite long-term growth, these sectors saw a temporary downturn due to weak global consumer demand.

Import Patterns

From the EU, Vietnam primarily imports:

• Machinery and equipment (industrial and medical).

• Pharmaceuticals.

• Chemicals and raw materials for textiles.

• High-tech and renewable energy components.

Imports grew slowly compared to exports, partly because Vietnam’s industrial upgrading and investment cycles take longer, and tariffs on many EU products are being phased out more gradually.

Trade Balance and Market Distribution

The EU is now Vietnam’s third-largest export market after the U.S. and China.

• In 2024, total Vietnam-EU trade reached US$72.9 billion, with Vietnam recording a trade surplus of US$34.3 billion.

• By mid-2024, Vietnam’s trade surplus with the EU was over US$20 billion, up nearly 20% year-on-year.

The largest EU importers of Vietnamese goods are:

• Netherlands – Vietnam’s main entry point into the EU, accounting for nearly 25% of exports.

• Germany – a hub for machinery, textiles, and agricultural imports.

• Italy, Belgium, and France are also key destinations.

This spread shows both concentration in a few hubs (like the Netherlands, due to Rotterdam’s role as a logistics gateway) and growing diversification.

Beyond Tariffs: Institutional and Regulatory Impacts

EVFTA’s influence goes deeper than tariff cuts.

1. Rules of Origin (RoO)

• To benefit from preferential tariffs, Vietnamese goods must prove their origin.

• For sectors like textiles, where inputs are often imported from China or other non-EU countries, meeting RoO is a challenge.

• Many SMEs still struggle with documentation, reducing their ability to leverage tariff preferences.

2. Standards and Non-Tariff Barriers

• The EU has strict requirements on food safety, environment, labor, and sustainability.

• For example, the EU’s upcoming Carbon Border Adjustment Mechanism (CBAM) will require exporters to report emissions for certain goods.

• Compliance requires significant investment in traceability and certification.

3. Customs and Administrative Reforms

• Vietnam has digitized certificates of origin and simplified customs, but businesses still complain of bureaucratic delays.

4. Attracting European Investment

• EVFTA boosted EU foreign direct investment (FDI) in Vietnam, particularly in renewable energy, high-tech manufacturing, and green infrastructure.

• Vietnam is positioning itself as a hub for sustainable supply chains serving Europe.

5. Wider Legal Reforms

• EVFTA obligations have pushed Vietnam to modernize laws on intellectual property, labor rights, and environmental protection, aligning closer with international norms.

Challenges Holding Back the Full Potential of the EVFTA

Despite clear progress, several hurdles persist:

1. Dependence on Imported Inputs: Heavy reliance on foreign raw materials makes it hard for exports to qualify for EVFTA preferences.

2. SME Limitations: Many small firms lack the resources to meet EU requirements, from certification costs to adapting production lines.

3. Infrastructure Bottlenecks: Ports, roads, and cold chains lag behind demand, raising logistics costs.

4. Non-Tariff Barriers: Meeting SPS standards, traceability demands, and sustainability certifications remains costly and complex.

5. Global Disruptions: COVID-19, supply chain shocks, inflation, and energy crises have periodically reduced export momentum.

6. Environmental and Social Pressures: EU buyers increasingly demand proof of sustainable practices. Exporters who fail to adapt risk losing access.

Strategic Adjustments in Vietnam

To capture EVFTA’s full benefits, Vietnam has been:

• Digitalizing trade processes, such as certificates of origin.

• Upgrading infrastructure (ports, logistics, cold storage) to handle larger export volumes.

• Training exporters to comply with EU standards.

• Supporting SMEs with awareness programs and export facilitation.

• Encouraging investment in green production to align with EU environmental policies.

Key Trends Shaping the Future of the Vietnam-EU Trade

• Widening Trade Surplus: Vietnam’s exports to the EU will likely continue outpacing imports until tariff schedules are fully implemented on both sides.

• Green Standards as a Market Gatekeeper: The EU’s focus on carbon, deforestation-free products, and labor rights will increasingly determine market access.

• Shift to Higher Value Chains: Electronics, renewable energy components, and branded agricultural products are becoming bigger priorities for Vietnam.

• Diversification Across the EU: While the Netherlands and Germany remain dominant, exporters are targeting emerging opportunities in Eastern and Northern Europe.

• More EU FDI in Vietnam: As European firms seek reliable Asian supply chain hubs, Vietnam’s EVFTA advantage makes it a top choice.

Conclusion and Final Verdict 

In conclusion, five years into implementation, EVFTA has been a game-changer for Vietnam–EU trade. The results are clear:

• Trade volume is up nearly 50% compared to pre-EVFTA levels.

• Vietnamese exports surged by more than 56%, especially in footwear, coffee, fruits, and textiles.

• Vietnam’s trade surplus widened, underscoring its growing role as a manufacturing and agricultural powerhouse for the EU.

Yet challenges remain. Rules of origin, compliance with EU sustainability standards, and infrastructure weaknesses continue to limit the full potential. To keep the momentum, Vietnam must double down on reforms, invest in green and high-value industries, and support SMEs in accessing the EU market.

For the EU, Vietnam is not only a key trading partner but also a strategic bridge to Southeast Asia. EVFTA has elevated this relationship beyond tariffs, embedding it in a framework of sustainability, quality, and long-term partnership. The next phase, as tariff elimination nears completion by 2027, will test how well both sides can deepen this integration, balancing competitiveness with sustainability.

We hope that you liked our data-driven and interactive blog report on the Vietnam-EU trade 2025 and the EVFTA. For more insights into the latest Vietnam import-export data, or to search live Vietnam trade data by country, visit VietnamExportdata. Contact us at info@tradeimex.in for a customized trade report, market insights, and the latest Vietnam customs database.