With the signing of the EU-Vietnam free trade agreement on Sunday, Christmas has come early for holiday card-maker Dang Trong Trung who says business could double with duty-free access to European markets.
The long-awaited deal inked in Hanoi on Sunday will eventually slash duties on 99 percent of Europe’s imports from Vietnam once the agreement is ratified.
That’s likely to mean big business for Trung’s Anh Duc packaging company in Hung Yen province near Hanoi.
His firm makes greeting cards, gift tags and paper and plastic bags, with $2 million in goods — about 60 percent of all their exports — destined for European markets.
“I hope in the next few years that export quantity and value will double,” Trung told AFP at his warehouse where a fresh batch of German Christmas cards featuring reindeer and snow-frosted pine trees were being printed.
Vietnam’s biggest exports today are textiles, shoes, and electronics such as smartphones and computer parts.
But with duties on almost all goods to Europe set to be slashed several years after the agreement comes into force, industries like Trung’s could secure a bigger share of exports.
The company has already started using more environmentally-friendly materials, knowing that plastics are becoming less desirable among European consumers.
And they hope access to high-quality raw materials from Europe will also improve now that tariffs have been slashed.
But the deal could also usher in greater competition from European card markers who may choose to transplant their business to Vietnam, a cheap-labour hub with a reputation for highly-skilled workers.
“When the (deal) comes into effect, there will be competition but we don’t worry much because we have 15 years of export experience,” said company director Vu Dinh Duc.
Vietnam’s booming economy has largely been propelled by free trade, with the majority of exports going to Europe, China and the US.
But observers say a long-simmering trade row between the United States and China has sharpened Hanoi’s desire to tie up a trade deal with Europe.
Though Vietnam has seen some short-term wins from the trade spat as companies shift business from China in order to dodge tariffs, analysts say no one wins if China and the US experience slowing growth — leaving their consumers with less money to buy Made-in-Vietnam goods.
Some workers at Anh Duc paper factory are hoping the EU free trade deal could help to soften that potential blow.
“We hope to have more clients and more contracts from Europe so we can have more income,” printer Ha Anh Binh told AFP.
“Our lives will improve”.