The Czech Republic and Vietnam already have a close trading relationship. Economic cooperation is without doubt the most dynamic field of bilateral relations between two countries. Vietnam is one of the most important trading partners of the Czech Republic in South East Asia. The bilateral trade has been growing steadily and the trade volume already exceeded 1 billion US dollars.
Table 1: Products exported from Czech Republic to Vietnam in 2018
Exports from the Czech Republic to Vietnam reached over US$140 million in 2018, an increase of 32.7% compared to 2017, according to the statistics released by the The World Integrated Trade Solution (WITS) – World Bank.
The main products exported from the Czech Republic to Vietnam include Machinery and Electronics with a total value of over US$ 88.08 million, which accounts for 62.5 % of the total export product share. They are followed by Miscellaneous, Chemicals, Plastic and Rubber with total values of nearly US$15 million, US$8.53 million and US$8.45 million respectively.
Other export products include Food Products, Metals, Stone and Glass, Vegetable, Wood with a total value of more than US$3 million each.
Table 2: Details of goods export to Vietnam from the Czech Republic in August 2020 and accumulated in the first 8 months of 2020
According to the data from General Department of Vietnam Customs, exports from the Czech Republic to Vietnam reached US$11 million in August 2020 – one month since the effectiveness of the EVFTA, and the total value reached nearly 84 million in the first eights months of the year.
It can be clearly seen from the table that the trade agreement initially has a positive effect on Czech export values to Vietnam.
Machinery, equipment, tools and spare parts still are the key products that Czech Republic exports to Vietnamese market with the total value of more than US$ 6.55 million.
The effects of the COVID-19 pandemic are particularly acute for Czech Republic’s export-reliant economy. Most of Czech Republic’s top products registered lower exports in first 8 months of 2020 compared to the same period last year. However, figures indicate that these losses were relatively mild and that Czech Republic’s goods are still in demand.
Import of iron and steel products from Czech into Vietnam in August 2020 increases by 120% compared to July, which is promoted by the reduction or elimination of tariffs and non-tariff barriers.
Economic experts of the Czech Republic believed that the EVFTA will generate big opportunities for the two countries to expand bilateral economic and trade ties as under this agreement, almost all tariff barriers will be gradually removed. This will help Czech businesses to boost exports in the fields they have strength in like textile-garment, glass, automobile, mechanics, electronic technique, food and chemical manufacturing.
Vietnam’s economic situation does not seem to be dramatically affected by the COVID-19 pandemic. Vietnam has not resorted to a blanket curfew, but has targeted measures at specific areas with the disease, keeping the economy going.
According to the Czech Republic’s Foreign Ministry, the EVFTA will help increase the country’s exports of mechanical products to Vietnam by over 30% in the next few years, and Czech enterprises will also have chances to engage in public procurement in Vietnam.
In terms of investment, many Czech companies have considered relocating factories to Vietnam after the COVID-19 epidemic. Vietnam has been a promising destination since the wave of factory relocation from China began.
Ivan Nikl
Regional Director of India and SE Asia
Head of Office at CzechTrade Vietnam
CzechTrade is a Government trade promotion agency of the Czech Republic. Its main objective is to develop international trade and cooperation between Czech and foreign entities.