Vietnamese garment exports to EAEU poised to exceed trigger level

According to the Ministry of Industry and Trade (MoIT), the European Economic Community (EEC) has issued a warning about Vietnamese textile and garment products which have been granted MFN (most-favoured-nation) tariffs being exported to the EAEU. Indeed, these items are at risk of facing a trigger safeguard measure for this year.

Among the items are dresses and garments knitted by Vietnamese women which have HS codes of 6104.41, 6104.42, 6104.43, 6104.44, 6104.49, 6204.42, 6204.44, and 6204.49. When these products were exported to the EAEU between January and July their volumes reached 79.4% of the quota for the year, meaning it is highly likely that it will exceed the trigger level for this year.

The MoIT also says that the Annex 2 of the Vietnam- Eurasian Economic Union Free Trade Agreement (Vietnam-EAEU FTA) regulates that safeguard measures should be triggered for a total of 12 Vietnamese goods, and garments are likely to be subject to these measures.

In the event that Vietnamese garment products exceed the trigger level for this year, they won’t be eligible to receive an MFN tariff in the subsequent six to nine months.   

The Vietnam-EAEU FTA was first put into effective in 2016, following trade turnover between Vietnam and the EAEU increasing by 5% each year during the 2011 to 2015 period.

Vietnam became the first partner to sign a free trade agreement (FTA) with the EAEU in 2016, meaning that Vietnamese goods are granted favourable conditions in order to make inroads penetrate into the market.

At present, the EAEU still has a high demand for garment, footwear, electronics, and agricultural products, all of which can be considered to be Vietnamese firms’ strength.

In contrast, the EAEU largely exports petrol and oil, machine, chemicals, iron and steel, consumer goods to Vietnam.