People in Rome, Italy, wear face masks to prevent infection of SARS-CoV-2

The EU had formally agreed to temporarily close its external borders for 30 days to restrict non-essential travel in an effort to slow the spread of the pandemic.

Ta Hoang Linh, Director of the ministry’s European – African Market Department, said that it was too early to say how the EU’s move would affect cross-border trade as the European Commission stressed that goods would not be restricted across external borders.

The biggest impact of the COVID-19 pandemic, according to Linh, is the declining demand as Europeans will stay at home and reduce shopping for products like footwear, clothes and wooden items which are Vietnam’s major exports to the bloc.

He stressed that the ministry is keeping a close watch on the development of the EU’s closure of its external borders and the impacts on cross-border trade to develop detailed scenarios and measures to limit the negative impacts on Vietnam’s exports.

He also urged firms to prepare for any possible impacts on their import-export activities.

According to statistics of the General Department of Customs, Vietnam’s export revenue to the EU market was estimated at 5.15 billion USD in the first two months of this year, representing a drop by 4.56 percent over the same period last year. Experts said that the decline was, however, just temporary and more time was needed to see the trend.

Vietnam is having significant opportunities to boost exports into the 18 trillion USD market when the EU – Vietnam Free Trade Agreement (FTA) is expected to come into force in July.

Research by the Ministry of Planning and Investment pointed out that the trade deal will help increase Vietnam’s export revenue to the EU market by 20 percent in 2020 and 42.7 percent in 2025 compared with the scenario of no trade deal.

The EU was a major export market of Vietnam with revenue increasing more than 14 times from 2.8 billion USD in 2000 to more than 41.5 billion USD last year./.VNA

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