Tiềm năng và thách thức trong lĩnh vực xuất khẩu thép sang thị trường châu Âu của các doanh nghiệp Việt Nam
Working Paper 2022.1.1.05
- Vol 1, No 1
TIỀM NĂNG VÀ THÁCH THỨC TRONG LĨNH VỰC XUẤT KHẨU THÉP
SANG THỊ TRƯỜNG CHÂU ÂU CỦA CÁC DOANH NGHIỆP VIỆT NAM
Nguyễn An Khang, Lưu Thanh Trúc
Sinh viên K59 Logistics & Quản lý chuỗi cung ứng – Viện Kinh tế và Kinh doanh quốc tế
Trường Đại học Ngoại thương, Hà Nội, Việt Nam
Nguyễn Phương Thảo, Đào Lê Khôi Nguyên
Sinh viên K59 CLC Kinh tế đối ngoại – Viện Kinh tế và Kinh doanh quốc tế
Trường Đại học Ngoại thương, Hà Nội, Việt Nam
Tóm tắt
Là thị trường đơn nhất lớn nhất thế giới và là một trong những thị trường khó tiếp cận hiệu quả
nhất, thị trường châu Âu đòi hỏi chất lượng cao, các hàng rào kỹ thuật khắt khe cũng như việc thực
thi nghiêm ngặt các tiêu chuẩn, điều kiện pháp lý, quy tắc và quy định. Hiệp định Thương mại tự
do Liên minh châu Âu - Việt Nam (EVFTA) được ký kết vào ngày 30 tháng 6 năm 2019 và có
hiệu lực từ ngày 1 tháng 8 năm 2020. Nghiên cứu của nhóm tác giả nhằm phân tích ảnh hưởng của
EVFTA đến xuất khẩu thép của Việt Nam. Sử dụng phương pháp nghiên cứu phân tích, tổng hợp
và đánh giá, nghiên cứu của chúng tôi đã có những kết quả nhất định. Kết quả cho thấy, mặc dù
việc thực hiện EVFTA tạo ra một số trở ngại đối với xuất khẩu thép của Việt Nam, nhưng về tổng
thể, hiệp định này tạo ra lợi thế cạnh tranh và thúc đẩy sự tăng trưởng của ngành luyện kim và xuất
khẩu thép của Việt Nam. Nghiên cứu đưa ra một số khuyến nghị nhằm khắc phục khó khăn và tối
đa hóa lợi ích mà hiệp định mang lại cho xuất khẩu thép của Việt Nam.
Từ khóa: EVFTA, thép, xuất khẩu thép.
POTENTIAL AND CHALLENGES IN THE FIELD OF STEEL EXPORT TO
THE EUROPEAN MARKET OF VIETNAM BUSINESSES
Abstract
As the world’s largest single market and one of the most difficult markets to access effectively,
the European market requires high quality, rigorous technical barriers as well as strict enforcement
of standards, legal conditions, rules and regulations. The European Union - Vietnam Free Trade
Agreement (EVFTA) was signed on June 30, 2019 and entered into force on August 1, 2020. This
research aims to investigate how the EVFTA affects Vietnam’s steel exports. Using the analysis,
synthesis and evaluation research method, our study has made certain findings. The results shows
that, although the implementation of EVFTA constitutes some obstacles to Vietnam’s steel
exports, in overall, the agreement creates competitive advantages and promotes the growth of
FTU Working Paper Series, Vol. 1 No. 1 (01/2022) | 65
Vietnam’s metallurgical industry and steel exports. Some recommendations to overcome
difficulties and maximize the benefits that the agreement brings are given in this research.
Keywords: EVFTA, steel, steel export.
1. Vietnam's steel export activities in the period of 2020 – 2021
The steel industry in recent years has had a significant growth in terms of capacity, output as
well as variety of steel types. Many businesses have invested trillions of Vietnamese Dong to
produce high-quality steel products that are popular in major markets around the world.
Vietnam's steel industry has progressed markedly in the region and played an increasingly
vital role in Southeast Asia’s steel market, making a leap in the world steel industry. According to
the “2020 World Steel in Figures” report (Basson, 2020), Vietnam ranked 14th in top 50 major
steel-producing countries 2018 and 2019 in the world, up 12 levels from 26th place in 2014
(Basson, 2015). In Southeast Asia, Vietnam was the top producer of steel, with 14.5 million tons
produced in 2018, accounting for over 30% of the region's total finished steel products output.
Vietnam was also the region's leading exporter of steel, with volumes increasing from 1 million
tons in 2010 to 6 million tons in 2018 (Cindy, 2020).
1.1. Vietnam's steel export activities in the period before the implementation of the EU -
Vietnam Free Trade Agreement (EVFTA)
In 2018, Vietnam's steel exports to most markets recorded positive growth. This growth
momentum is largely due to the stable macroeconomics, many infrastructures, construction and
real estate projects were implemented, especially the disbursement of public investment capital,
which has been focused on by the Government from the first months of 2018 (Minh, 2019).
Thuy (2018) presented data based on the statistics published by the General Department of
Customs. In the first 11 months of 2018, Vietnam's steel exports reached 5.78 million tons, worth
nearly 4.21 billion USD, a sharp increase of 36.2% in volume, up 49.5% in turnover compared to
the same period in 2017. The leading markets for Vietnam's steel consumption are the Association
of Southeast Asian Nations (ASEAN) and the American market.
The table below shows Vietnam’s steel exports to prominent markets in the first 11 months of
2018 and compares them with the figures for the same period in 2017. The table also shows the
share of these markets in the total export volume and turnover of steel.
Table 1. Vietnam’s steel exports to prominent markets in the first 11 months of 2018
The first eleven months of Compared to the same Proportion of steel
2018
period in 2017 (%)
export (%)
Market
Volume
(tons)
Turnover
Volume
Turnover Volume Turnover
(million USD)
796.71
Cambodia 1,239,198
53
74.4
96.2
20
21.4
15.2
10.6
9.7
18.9
17.6
11.3
9.2
America
Indonesia
Malaysia
876,666
610,518
561,662
743.84
86.2
11.8
58.8
477.44
388.88
79.8
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The first eleven months of Compared to the same Proportion of steel
2018 period in 2017 (%) export (%)
Market
Volume
(tons)
Turnover
Volume
Turnover Volume Turnover
(million USD)
357.06
187.76
181.86
213.5
EU
Taiwan
Philippines
Thailand
Korea
432,559
352,893
320,312
317,229
256,673
6,761
12.2
249.1
-22.7
52.8
0.6
27
7.5
6.1
5.5
5.5
4.4
0.1
8.5
4.5
4.3
5.1
4.1
0.2
189.3
-6.1
47.3
17.4
-18.5
173.32
8.8
China
-22.4
Source: Authors synthesized based on the data of Thuy
In 2019, steel exports to most markets decreased in both volume and turnover compared to
last year. Thuy (2020) presented data based on the statistics published by the General Department
of Customs. Vietnam's steel exports reached 6.68 million tons, worth nearly 4.21 billion USD, up
6.6% in volume but down 7.4% in turnover compared to 2018.
Steel exports to America fell sharply by 57.6% in volume, down by 59.4% in turnover. This
is because in July, according to Bloomberg News (2019), the U.S. Commerce Department imposed
a tax rate of more than 400% (specifically 456.23%) on Vietnamese steel products using materials
originating from Korea and Taiwan. However, exports to China were 442,604 tons, equivalent to
192.63 million USD, and compared to the previous year, it increased very strongly by 5552% in
volume and 1849% in turnover. ASEAN, America along with China are the three largest importers
of Vietnam's steel products in 2019.
The table below shows Vietnam’s steel exports to prominent markets in 2019 and compares
them with the figures for 2018. The table also shows the share of these markets in the total export
volume and turnover of steel.
Table 2. Vietnam’s steel exports to prominent markets in 2019
Compared to the year
2018 (%)
Proportion of steel
export (%)
The year 2019
Market
Volume
(tons)
Cambodia 1,699,253
Turnover
(million USD)
986.75
Volume
Turnover Volume Turnover
22.9
27
11.6
7.8
25.4
13.1
11.2
6.6
23.4
13.6
10.9
4.6
Indonesia
Malaysia
China
873,473
744,987
442,604
383,907
378,527
574.09
458.55
23.4
5552
-57.6
11.1
9.7
192.63
1849.1
-59.4
-0.3
America
Thailand
313.41
5.7
7.4
229.56
5.7
5.5
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Compared to the year
2018 (%)
Proportion of steel
export (%)
The year 2019
Market
Volume
Turnover
(million USD)
239.31
Volume
Turnover Volume Turnover
(tons)
EU
Philippines
Korea
334,468
285,176
225,876
204,435
-23.1
-14.8
-22.5
-45.4
-34.3
-28.6
-22.7
-41.7
5
5.7
3.2
3.6
2.8
135.31
4.3
3.4
3.1
151.9
Taiwan
116.21
Source: Authors synthesized based on the data of Thuy Chung
1.2. Vietnam's steel export activities in the period under the implementation of the EU - Vietnam
Free Trade Agreement (EVFTA)
Exports in 2020 of Vietnam's steel industry faces more difficulties than in 2019 when 5 more
countries are conducting anti-dumping investigations on Vietnamese galvanized steel products and
steel pipes. In which, there are 2 countries in the market of Southeast Asia, Malaysia and the
Philippines. China and ASEAN are Vietnam's main export markets while the amount of steel
exported to the European (EU) market is still very modest even though the EVFTA has been put
into effect since August 1, 2020.
Thuy (2021) presented data based on the statistics published by the General Department of
Customs. Vietnam's steel exports reached 9.86 million tons, worth nearly 5.26 billion USD, a sharp
increase of 47.9% in volume, up 25% in turnover compared to 2019.
The table below shows Vietnam’s steel exports to prominent markets in 2020 and compares
them with the figures for 2019. The table also shows the share of these markets in the total export
volume and turnover of steel.
Table 3. Vietnam’s steel exports to prominent markets in 2020
Compared to the year
2019 (%)
Proportion of steel
export (%)
The year 2020
Market
Volume
Turnover
(million USD)
1482.5
Volume
Turnover Volume Turnover
(tons)
China
3,537,585
717.7
-8
669.6
-14.9
72.7
-19.8
-41.1
81.2
-1
35.9
15.9
6.9
28.2
16
Cambodia 1,563,602
839.69
Thailand
Malaysia
Indonesia
Philippines
EU
675,482
629,419
551,427
556,803
309,000
390.51
82.3
-15.5
-36.9
95.2
-6,9
7.4
7
367.97
6.4
338.3
5.6
6.4
4.7
4.5
245.24
5.7
235.5
3.13
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Compared to the year
2019 (%)
Proportion of steel
export (%)
The year 2020
Market
Volume
Turnover
(million USD)
154.19
Volume
Turnover Volume Turnover
(tons)
Taiwan
Korea
293,613
282,723
191,334
42.7
25.1
-50
32.7
5.9
3
2.9
3.1
3.3
160.91
2.9
1.9
America
173.26
-44.5
Source: Authors synthesized based on the data of Thuy Chung
The year 2021 has witnessed strong growth in steel exports, especially to the EU market.
Thuy (2021) presented data based on the statistics published by the General Department of
Customs. In the first 6 months of 2021, Vietnam's steel exports reached 5.88 million tons, up
50.5% compared to the same period in 2020, with a value of 4.52 billion USD, up 117% compared
to the same period in 2020. China, Cambodia, and the new factor - EU are the three largest
importers of Vietnam's steel products with a sudden high growth rate compared to the same period
in 2020.
The table below shows Vietnam’s steel exports to prominent markets in the first six months
of 2021 and compares them with the figures for the same period in 2020. The table also shows the
share of these markets in the total export volume and turnover of steel.
Table 4. Vietnam’s steel exports to prominent markets in the first six months in 2021
The first six months of
2021
Compared to the same Proportion of steel
period in 2020 (%) export (%)
Market
Volume
(tons)
Turnover
(million USD)
683.32
Volume
Turnover Volume Turnover
China
Cambodia
EU
1,201,474
671,372
639,480
364,786
338,730
335,775
304,235
280,147
225,960
125,274
13.4
-9.8
61.7
20.6
615.2
61.4
93.6
283.2
49.6
65.5
139.1
32.2
20.4
11.4
10.9
6.2
15.1
10.5
13.1
6.6
475.89
593.76
525.5
12.6
53.4
249.3
1.3
Malaysia
Indonesia
America
Thailand
Philippines
Taiwan
297.14
254.06
5.8
5.6
332.1
5.7
7.3
243.53
5.2
5.4
169.47
17.1
74.1
-10
4.7
3.8
161.3
3.8
3.6
Korea
100.2
2.1
2.2
Source: Authors synthesized based on the data of Thuy
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Steel exports are having a number of advantages when steel demand in various markets has
been increasing steadily for several months. Exports to the EU have increased by 5 times over the
same period and more than 2 times compared to exports in the whole year of 2020, more or less
affected by EVFTA which has been in effect for 11 months. The EU is known to be a market that
requires products to meet very high and strict standards, however, the sharp increase in exports
partly shows that Vietnamese enterprises have standardized production as well as satisfying high
requirements from consumers of the importing country.
2. Regulations related to the export of steel products to the European market
2.1. Regulations of the EU-Vietnam Free Trade Agreement (EVFTA)
2.2.1. Definition
The EU–Vietnam Free Trade Agreement (EVFTA) is a free trade agreement between the 27
European Union (EU) member states and the Socialist Republic of Vietnam.
This new free trade agreement is an essential and finest agreement which provides balanced
benefits for both Vietnam and the EU, with consideration for the differences in development levels
between the two partners.
When this agreement comes into force, the EVFTA is expected to be a great boost to Vietnam's
exports, helping to diversify markets and exports, particularly agricultural and aquatic products as
well as Vietnamese products with competitive advantages.
2.1.2. Negotiation and signing process
The EVFTA negotiating rounds were formally announced to be completed on December 1st,
2015, and its official full text was published on February 1st, 2016. In terms of trade and
investment, EVFTA was split into two agreements on June 26, 2018. The legal evaluation of the
Investment Protection Agreement (IPA) and the final wording of the EVFTA was also completed
at the same time.
On June 30, 2019, both agreements were signed. The European Parliament accepted EVFTA
and EVIPA on February 12, 2020, while the Vietnamese National Assembly approved them on
June 8, 2020. After ratification, the EVFTA Agreement entered into force on August 1, 2020.
2.1.3. Commitments:
The agreement includes 17 chapters, two protocols and several attached memorandums, with
main contents covering the following aspects:
● Trade in goods;
● Services, investment liberalisation and e-commerce;
● Government procurement;
● Intellectual property rights.
The EVFTA also covers other aspects including rules of origin, customs and trade facilitation,
sanitary and phytosanitary measures, technical barriers to trade, sustainable development,
cooperation and capacity building, and legal-institutional issues.
2.1.4. The importance of EVFTA
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The EVFTA's level of commitment is the highest that Vietnam has achieved so far among
signed FTAs. According to statistics, the EU was Vietnam's second largest export market in 2018.
The EVFTA's strong commitments to market opening will certainly improve commercial
relations between Vietnam and the EU, helping to expand the market for Vietnamese
products.State governance commitments would help provide a stable and open business and legal
environment for both sides' investors. To be more specific, after the negotiation and signing
process, Vietnam recorded a considerable growth in the output of exported steel to Europe markets
as well as other commodities such as textile or seafood.
Through the EVFTA, EU investors will have opportunities to gain access to markets that have
signed FTAs with Vietnam with more preferential treatment. The agreements also help to promote
relations between the EU and each ASEAN country and the ASEAN bloc at large, creating a
foundation towards negotiating an FTA between the EU and ASEAN in the future.
2.2. Policies related to exported steel procedurement
2.2.1. Other free trade agreement commitments:
Before the signing of the EU–Vietnam Free Trade Agreement between Europe and Vietnam,
according to the General Department of Customs (2015) in VLXD, the traditional export market
of the steel industry was still mainly ASEAN countries. In 2015, Vietnam exported to this market
nearly 1.8 million tons of steel of all kinds with a total value of nearly 1.13 billion USD. Cambodia
is ASEAN's largest steel importer from Vietnam, then Indonesia, Thailand, Malaysia…. In the
next few years, America was the hottest destination for the exported steel market.
However, as a result of the signing of some major free trade agreements between Vietnam and
partners from 2010 to 2019 before the EVFTA, our exported steel market witnessed remarkable
growth. There are some critical policies was established related to the process of exporting
Vietnam steel to our partners in free trade agreement could be mentioned below:
● In VCFTA, Chile will eliminate tariffs for 99.62% of Vietnam's exports (as of 2007) within
10 years, of which 81.8% of turnover and 83.54% of tariff lines will be eliminated immediately;
● In CPTPP, Major markets such as Japan and Canada reducing import tax to 0% for our
goods will create positive effects in promoting export turnover.
2.2.2. EU–Vietnam Free Trade Agreement commitments:
The elimination of tariff barriers will be at the highest level, which will benefit exports of
both sides.
After the trade deal takes effect, the EU will eliminate about 85.6% of import tariffs on
Vietnamese goods, equivalent to 70.3% of Vietnam’s revenue from exports to the EU.
Within seven years of the deal taking effect, the EU will remove 99.2% of tariffs, equivalent
to 99.7% of Vietnam’s revenue from exports to the EU.
Regarding the remaining 0.3% of Vietnam’s export revenue, the EU pledged to provide
Vietnam with tariff-rate quota, with the import tax rate set at 0% within the quota.
3. Vietnam's steel exports to the EU in the context of the European Union - Vietnam Free
Trade Agreement (EVFTA)
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After one year of implementing the EVFTA, despite the challenges caused by the Covid-19
pandemic during the year, bilateral trade and investment exchanges have achieved some positive
results. Many challenges have been set for the coming period, requiring the cooperation of
ministries, sectors, localities, and especially the business community to work together to solve and
take advantage of opportunities from this agreement successfully. However, the EVFTA also
brings many opportunities and has a positive influence on international trade activities between
Vietnam and the EU, especially in developing the steel export industry to European countries.
3.1. Opportunities
Steel is one of the industries that are expected to benefit the most from the EVFTA. The
agreement creates more opportunities for Vietnamese steel enterprises to diversify markets and
increase export turnover to the EU because, in addition to the tax reduction roadmap, the EU and
Vietnam's steel industry already have high-quality export products, complementary and not
competing directly with each other.
3.1.1. Impact of tariff preferences on steel export industry
The tariff preferences in the EVFTA have brought major advantages to Vietnam's steel export
industry. In order to be able to gain the tariff preferences of the EVFTA, goods must meet a number
of conditions, specifically the requirements of origin of the rules of origin. According to the
EVFTA, the rules of origin are the combination of criteria necessary to ensure the identification
of the origin of the nationality of the goods and at the same time designed to ensure that such goods
are entitled to tariff preferences if fully complying with regulations of origin.
In detail, the agreement was approved by the two sides with beneficial terms for Vietnam's
export industries, including steel, when receiving the tax rate to 0% according to the commitments
of the EVFTA. It means that the EU will eliminate tariffs on Vietnamese steel products for a period
of more than seven years. Toan Thang Steel Trading Company, which has never exported steel to
the EU, has chosen the way to sell products to this market to benefit from EVFTA opportunities.
Mr. Vu Van Thanh, Deputy General Director of Hoa Sen Group of Vietnam has faith that the
EVFTA will bring them more opportunities to export products to this market. Thereby, with tariff
preferences, the EU is a big market for Vietnamese steel enterprises in particular and those in other
sectors in general.
3.1.2. Competitiveness opens up opportunities for Vietnam's steel export industry
The economies of EU member countries are all developed at a higher level than Vietnam and
are supportive to the Vietnamese economy, exports from EU countries are largely non-competitive
because between the EU and Vietnam there are complementary, non-conflict export items,
including steel. Since then, the demand for EU steel products can increase, helping us to extend
the amount of steel exported to the EU more sustainably. By building a reasonable tax reduction
roadmap, combined with perfecting the social security system, Vietnam can handle problems
related to steel exports due to joining the EVFTA. In that way, we can open up opportunities for
Vietnamese steel enterprises to form markets and increase export turnover to the EU.
Even so, the EVFTA agreement has created a competitive advantage, along with Singapore,
Vietnam is one of two countries in Southeast Asia that have implemented an FTA with the EU, so
it has an added competitive benefit in exporting many products to this market, especially steel,
contributing to the growth of export turnover of this item.
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3.1.3. Vietnam's steel exports to the EU
Steel exports are gaining many advantages when the demand for steel in many markets,
especially the EU market, has been increasing strongly in recent months in 2021 - according to an
assessment of the situation of Vietnam's steel market in the first half of 2021 (Vietnam Steel
Association, 2021). The increase in steel consumption demand of the EU leads to a 5 times increase
in exports compared to the same period in 2020. Due to the impact of the EVFTA, many businesses
have taken advantage of the opportunity to promote exports through trade facilitation. Broadly
speaking, Vietnam has the opportunity to continue to expand exports to many other countries in
the EU besides Italy, Germany, Spain, etc because the quality of our country's steel has satisfied
the strict requirements of the EU.
Finally, from the perspective of Vietnam, the EVFTA opens up significant opportunities for
investors to know how to optimize their resources and take advantage of the benefits of being
located in a country with large preferential tax rates and exports. increasingly with the European
Union. According to the article “Understanding tariff elimination under EVFTA”, the data
collected from Vietnam's Ministry of Industry and Trade, by 2025, the export of goods, especially
steel, to the EU is expected to increase by over 40%. The EVFTA is a milestone and opportunity
for both Vietnam and the EU to increase cross-border investments and trade, and also contribute
to the GDP growth of both sides, modernizing their economical, social, and trade relationships as
well.
3.2. Challenges
After a year of successful implementation of the EVFTA Agreement, the Vietnam steel
industry has faced many difficulties and challenges in exporting steel to the EU despite the
advantages gained, according to experts. In fact, this is not an easy market for the steel industry.
Due to the fact that countries are in the period of closure due to Covid-19, leading to supply chain
disruptions, making it difficult for steel exports worldwide in general, and Vietnam in particular.
During the past year, Vietnam's steel exports in the EU market only reached 3.18%, a minor
part of Vietnam's steel export structure due to the Covid-19 pandemic. Many EU countries fell
into crisis, were forced to close, leading to supply chain disruptions, making it difficult for
Vietnam's steel exports.
3.2.1. Limitations in optimizing incentives from EVFTA.
After more than 1 year of applying the EVFTA agreement, Vietnam has not yet been able to
take advantage and boost exports to the EU. “Although our country's steel export index to the EU
has increased significantly compared to the same period last year, Vietnam is still focusing on a
few traditional markets, such as ASEAN, the United States... and the domestic market,”
commented by Mr. Nguyen Van Sua - an expert in the steel industry, according to the article
“EVFTA and opportunities for the steel industry” (Cong, 2020).
In the article “EVFTA and opportunities for the steel industry”, Ms. Pham Quynh Mai, Deputy
Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), has
emphasized that although the provisions of the Free Trade Agreements (EVFTA) are beneficial to
Vietnam, if do not know how to take advantage, steel enterprises of Vietnam still cannot increase
the value of steel exports and develop the EU market.
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3.2.2. The negative impact of the Covid-19 pandemic on steel exports to the EU.
The emergence of Covid-19, as well as other complicated circumstances, have had a
significant impact on the EVFTA implementation plan. Since the agreement came into force until
now, due to the constant obstacles caused by the epidemic, many difficulties and challenges have
caused the utilization of the EVFTA to fail to achieve the expected results. In Vietnam, under the
impact of the pandemic, the steel production - export industry in the first half of this year was also
affected. This is not a very positive number for enterprises in the steel industry because the market
demand has decreased due to the negative impact of the pandemic. In the context of competition,
the epidemic from the beginning of the year to now in EU countries has also caused this region to
remain static, and the export market has narrowed. The trend of trade defense continues to increase,
making it very difficult to expand the market. The pandemic has also caused great damage to many
Vietnamese enterprises, forcing them to make adjustments in their business investment strategies
to suit the situation.
3.2.3. A decline in steel consumption of EU countries.
The world steel demand in the upcoming months, specifically in the EU region, is expected
to slow down due to economic and political fluctuations. The EU is increasing the application of
trade remedies to create barriers to restrict steel imports. It is forecasted that the export growth of
the steel industry to the EU market in the coming time will not be high. Even if there is an
agreement, the export of steel products to the EU will depend a lot on non-tariff barriers rather
than tariffs.
3.2.4. Disadvantages of meeting strict EU product requirements.
The most challenging factor is product quality, due to the requirements from EU countries. In
addition, the EU also requires the very high origin of goods and businesses must be clear and
transparent about the origin to do business. According to Trinh Khoi Nguyen, Vice Chairman of
the Vietnam Steel Association, the EVFTA has opened up great opportunities for the steel industry.
However, in order to enter the European market, Vietnamese steel products must meet many high
and strict standards. Therefore, Vietnamese enterprises have standardized production, satisfying
high requirements from the importing country, thereby dramatically increasing steel exports, while
ensuring output and product quality. Many business owners believe that the EU market is a market
where consumption growth is not large, like potential markets such as China or other developing
countries. Although there are opportunities, the market's demand is not large enough to absorb the
volume of imports from abroad. Meanwhile, in order to participate in the EU market, we have to
compete with very strong countries in the steel industry such as China, Japan, and South Korea,"
Mr. Nguyen said.
4. Recommendations for Vietnam's steel exporters
4.1. Applying new-generation FTA on the development of Vietnam's steel industry
The effective EVFTA will create specific competitive advantages, which contribute to the
increase of the volume of exports of the construction materials industry in general, especially the
steel products. However, as global steel demand is projected to drop due to economic and political
uncertainty, the EU is stepping up its use of trade remedies, creating barriers to steel imports. Thus,
the opportunities that the EVFTA Agreement brings go hand in hand with the difficulties and
challenges that businesses face when implementing.
FTU Working Paper Series, Vol. 1 No. 1 (01/2022) | 74
Therefore, enterprises must pay attention to having a strategy plan, development in the new
market, trading context with the EVFTA Agreement and luggage ready for the future in order to
take advantage of the EVFTA Agreement's opportunities while also strictly enforcing the EVFTA
Agreement's regulations.
● Firstly, Vietnam must focus on expanding science and technology to keep up with the
industrial revolution 4.0 in order to satisfy EU clients. The increase in competitiveness in
this field brings great benefits to Vietnam when participating in the global supply chain.
Science and technology serves as a tool, a driving force, and a foundation for the growth of a
knowledge economy, but at the same time is also an object of influence of Industry 4.0. As a result,
this understanding is critical because, in order to construct the basis and primary components for
economic development - society in the Industry 4.0 environment, we must invest in growing core
industries and fields of research and technology. Therefore, businesses themselves need to quickly
change their thinking, be aware of the importance of innovation, promote investment in scientific
research, and apply for subsidies from the state for research to administer science, technology into
the production and infrastructure.
In conclusion, when Vietnam implements new-generation free trade agreements, businesses
that want to survive and grow must promote technological innovation and apply scientific and
technology breakthroughs to manufacturing and business to improve quality, volume, numerous
new goods, product diversification, productivity; rational and cost-effective use of materials…
They also strongly promote the implementation of targeted research suitable for each specific need,
as well as specialization and speeding up the process of bringing new and improved products to
application. Only then will we be able to compete and expand the market, develop production of
the business in a quick and sustainable way. This is the right direction of enterprises in every
development stage.
● Secondly, Vietnamese goods must be elevated to a higher level of quality, standardized,
and environmentally friendly. This not only enhances product quality, but also aids "made
in Vietnam" products in avoiding protectionism from other countries, not just the EU.
Vietnam's new generation FTA market countries are all fastidious markets with high
requirements for quality standards and a tradition of using non-tariff measures. and trade remedies
to protect the domestic market. On the other hand, the system of quality standards for products in
Vietnam's material industry is still incomplete, so the quality of Vietnam's products is still not
high, not synchronized with the global quality, so Vietnamese products Nam has not yet been able
to gain a competitive advantage in foreign markets.
➢ Properly use economic levers such as increasing material rewards and responsibility for
produced products, taking appropriate disciplinary measures against workers who fail to
meet quality standards.
➢ Raise the sense of responsibility, political level, self-check for workers. Training to
improve their professional skills.
➢ The supply of raw materials is ensured in accordance with specifications, types, quality,
transportation and storage time. Develop trusting relationships with both raw material
suppliers and customers.
FTU Working Paper Series, Vol. 1 No. 1 (01/2022) | 75
➢ Technical measures: Strictly check the respect for the technological process of
manufacturing products. Ensure that the manufactured products must fully meet the set
specifications.
➢ Enterprises need to actively improve their capacity to use and respond to trade remedies,
and at the same time equip knowledge linkages.
➢ The government needs to quickly come up with a set of common quality assessment rules
to ensure the quality of the exporting products.
4.2. Recommendations in the context of the Covid pandemic
As stated in the first part of the essay, the VSA has just released a report in detail and data
assessing the impact of the Covid-19 epidemic on Vietnam's steel industry. The report concluded
that the epidemic had an impact on the steel industry, causing the business efficiency of enterprises
in the industry to drop sharply, even at a loss. Since the beginning of the year 2020 until now,
many projects and projects have been stopped or delayed due to concerns about the COVID-19
epidemic, which has made the steel and mechanical market gloomy, many businesses only produce
in moderation, and have few sales transactions.
The VSA said that before the Lunar New Year holiday 2021, a specific enterprise spent 6
billion VND on testing, and 10 billion VND after Tet for the factory in this area when there are
suspected cases. Regarding price movements, VSA said that in the first two months of the year
2020, due to weak demand, construction steel prices tended to decrease, while prices of some
production materials tended to increase due to the stimulus package of the government as
prescribed in the first part and also the supply constraints. from China (coke, iron ore, electrode
coal).
● In order to remove difficulties for businesses, the document of the VSA suggested that the
State Bank and joint stock commercial banks consider promulgating credit support policies
such as extending and extending the time of loans coming due for payment; at the same
time, reducing interest rates helps steel enterprises overcome this difficult period.
Facing the recent complicated and unpredictable developments of the world steel market
affecting the price of domestic steel products, the VSA has just issued a written recommendation
to its member enterprises to implement a solution to contribute to stabilizing the domestic market.
Recently, steel prices on the global market as well as in Vietnam have complicated
movements. Steel prices in 2021 tend to increase from the end of 2020 until the middle of the first
quarter of 2021 with a downward adjustment, then continue to increase until the end of May 2021,
starting a downward trend. The current market has stabilized and has a new price level.
● Companies must improve their coordination and cooperation, limit their exports, and
prioritize raw materials and semi-finished products for the domestic market. Steel
companies should continue to expand their capacity, increase steel product output, arrange
a reasonable distribution system to stabilize domestic supply, completely meet domestic
steel market demand and declare and list prices in accordance with the law.
5. Conclusion
FTU Working Paper Series, Vol. 1 No. 1 (01/2022) | 76
In conclusion, this study was conducted by the authors to assess the effects that the EVFTA
agreement has had on Vietnam's steel export industry to the EU market since the agreement
officially took effect on January 8th 2020. The above study shows the position of Vietnam's steel
industry in the world steel market, along with steel export activities since the EVFTA was signed
and issued. The study also figured out the regulations and policies that Vietnam must commit to
implementing in order to receive tariff preferences for the steel export industry. In addition to a
few advantages that the EVFTA has created, most of which are difficulties and challenges that the
steel industry has to face during the implementation of the agreement, especially during the Covid-
19 pandemic that caused many obstacles to the cooperation process between Vietnam and EU. The
results drawn from the above analysis have led to some recommendations for Vietnamese steel
exporters such as the application of new-generation FTA (Focusing on science and technology to
catch up with EU countries, etc) or solutions given in the context of the Covid-19 pandemic. It is
concluded that businesses need to know how to take advantage of opportunities, limit and
overcome difficulties with reasonable measures to be able to optimize the chances that the EVFTA
has brought to Vietnam's steel export industry.
FTU Working Paper Series, Vol. 1 No. 1 (01/2022) | 77
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