The EU-Vietnam Free Trade Agreement (EUVFTA) has significantly expanded the opportunities for Vietnamese businesses to establish a stronger foothold in the French market and the broader EU. To maximize the opportunities, these businesses must be well-informed about the regulations and benefits provided under the agreement to strengthen their presence in the country.

A report from the General Department of Vietnam Customs puts Vietnam’s exports to France in the first half of 2024 at $1.58 billion. These exports are diverse and cover a wide range of categories, including agricultural, forestry, and fisheries products, electronics, and textiles.

Imports from France, meanwhile, totaled nearly $883 million in the period, up 11.28 per cent year-on-year. Pharmaceuticals were the largest category, worth $284 million, an 18.48 per cent increase and representing 32.16 per cent of the total. The other import category with value exceeding $100 million was machinery, equipment, tools, and spare parts, which posted a 48 per cent increase to $106.4 million.

Vietnam therefore recorded a trade surplus of nearly $700 million with France in the first half of 2024.

Two major catalysts

The Ministry of Industry and Trade (MoIT) has reported that Vietnamese exports to France have experienced remarkable growth since the Covid-19 pandemic. According to the International Trade Centre (ITC)’s Trade Map, Vietnam ranked as France’s 22^nd-largest import source in 2023, contributing 0.9 per cent of its total import value.

The ministry attributes the strong growth in Vietnamese agricultural exports to France to two key factors.

The first is promotional activities and efforts at consumer orientation led by the Vietnam Trade Office in the country, with initiatives gradually helping Vietnamese products gain recognition and acceptance among French consumers. The Trade Office successfully introduced fresh Vietnamese fruit to France in 2021, particularly lychees and longans, with canned fruit products also entering the French supermarket network for the first time.

In 2022, with a renewed marketing strategy, Vietnamese rice made its debut on the shelves of major French hypermarkets. In late July 2024, the “Bonjour Vietnam” event organized by the Vietnam Trade Office in France, the MoIT, and the Ministry of Culture, Sport, and Tourism, aimed to unite Vietnamese associations around the country. The event played a key role in fostering a strong and cohesive Vietnamese community in France while promoting the image of Vietnam and its agricultural products to the local population. It included various product weeks held in France’s largest hypermarkets, such as the Vietnamese Lunar New Year Week at Carrefour, the Mid-Autumn Festival Week, and the first-ever Vietnamese-branded rice week.

Mr. Vu Anh Son, Head of the Vietnam Trade Office in France, said demand for Vietnamese products around France has now stabilized. Further market stimulus is needed, however, to generate additional demand for Vietnamese agricultural goods. This is the primary reason behind a collaborative initiative between representatives from MoIT and France’s Ministry of Culture. “We aim to create a unified platform to connect and promote the Vietnamese business community in France, thereby building a solid bridge and sustainable access channel for Vietnamese goods to enter the French market,” Mr. Son explained.

The second catalyst stems from the tariff incentives offered by the EUVFTA, which have provided a significant advantage for Vietnamese exports. The agreement has proven to be a vital motivator, encouraging Vietnamese enterprises to participate in global supply chains in a more professional and strategically-planned manner. “With the EUVFTA in effect, trade relations between the two countries are evolving favorably for Vietnam, and this trend is expected to continue as Vietnam’s export structure aligns well with the mid-to-low market segments in France,” the MoIT has reported.

Enhancing quality to meet EU standards

While there is considerable potential for Vietnamese businesses to penetrate into or expand in the French market, the MoIT believes they will face significant challenges due to the market’s strict environmental and social standards. To capitalize on export opportunities and access the French market more effectively, manufacturers and suppliers must prioritize maintaining high product quality, upgrading their quality management systems by securing international certifications, and adhering to regulations regarding pesticides, colorants, and food additives.

Mr. Son said that elevating the quality of export products to align with EU standards is now essential, and Vietnamese exports must strictly comply with the bloc’s regulations on food safety, quality management, and environmental protection. Such compliance would not only boost the competitiveness of Vietnamese goods in France but also help build a positive national brand and image on the international stage.

Continuous efforts are also needed to maintain product quality to meet the growing demands of consumers and to compete with products from other countries. Many of Vietnam’s leading export items, such as jackfruit and dragon fruit, are now being sold in French supermarkets but are sourced from Africa. Vietnamese exporters must therefore develop a sustainable international strategy focused on high value added products, and should also continue improving their quality management systems by securing international certifications and ensuring compliance with standards related to pesticides, colorants, and food additives.

Mr. Son emphasized that maximizing the benefits of the EUVFTA is crucial for Vietnamese products to gain and maintain a foothold in the French market. The tariff advantages provided under the agreement for Vietnamese exports require that businesses fully understand its regulations and benefits to make the most of the opportunities on offer.

In addition to the efforts of individual businesses, he suggested that relevant agencies assist companies in understanding and adapting to the French market’s demands. The government could create favorable conditions for investment, business operations, infrastructure development, and industrial parks. Administrative reforms should also be enhanced to facilitate European businesses, especially French companies, in partnering and investing in Vietnam, leveraging the advantages offered by the EUVFTA.

The Vietnamese Entrepreneurs Association in France has observed that changes in France’s economy, society, and demographics have impacted consumer trends in agricultural and food products. By way of example, French consumers are increasingly interested in innovative and creative food products, particularly traditional dishes from different countries with unique themes and flavors.

It is anticipated that demand for essential consumer goods and household items in France will continue to rise. Key Vietnamese exports such as garments, sports shoes, rice, coffee, pepper, and seafood are becoming more popular among French consumers, including the large Vietnamese and other Asian communities. These products are also becoming increasingly competitive in the French market and are likely to expand their market share in the years ahead. However, for certain seafood products, businesses must strictly adhere to food safety standards and be cautious about payment conditions in export contracts to avoid potential losses.

Another market segment that businesses could explore is the growing demand for organic products. Though not a new trend, French consumers are increasingly focused on environmental and health issues, leading to a preference for clean, organic agricultural and food products. Certified organic agricultural and seafood products have significant potential to expand their market share in the country.