Vietnam is the big winner of the trade dispute between the USA and China: "Companies are changing their supply chain strategies and considering moving their factories from mainland China to new locations in Southeast Asia," observes Michael Krutil, Managing Director at a. hartrodt logistics (Vietnam) in Ho Chi Minh City. The trend is accelerated by the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA). These agreements between the EU and Vietnam were ratified at the beginning of June 2020, EVFTA has been in force since August 1, 2020.
Imports/exports and investments will become easier
Krutil believes that the two agreements will give a. hartrodt's customers "much greater scope to expand their key import/export activities, simplify processes and at the same time promote long-term investments and strategic business partnerships". Born in the region of Franconia, he has been working for a. hartrodt in Vietnam for seven years. He expects German companies in particular to bring high added value to the country.
Additional growth engine: inner-Asian transports
Since 2004, a. hartrodt has a national subsidiary with 26 employees in Ho Chi Minh City and offices in Hanoi and Vung Tau. Food & Beverage is well established as a strong pillar. Krutil is pleased that EVFTA will eliminate over 99 percent of all tariffs: "Only Singapore has that likewise". And the EU is eliminating tariffs "on thousands of items from Vietnam". All of this will further boost Vietnam's economy, as well as its trade with China, Korea and Japan: "With direct maritime connections and competitive transit times, shippers from various Asian countries and Vietnam can reach their markets within a week". Advantage for customers: a. hartrodt is present almost everywhere in the region.
With regard to the Covid-19 pandemic, the Vietnamese government implemented measures very early. Currently there are no local impairments due to Corona. "In the third quarter, the economy has started up again and national consumption is enormous," says Krutil.