Shifting production to expand exports to the Northern European market

Illustration image. By H. Dịu

According to the Vietnam Trade Office in Sweden, concurrently in charge of Northern European countries, in the first 5 months of 2024, two-way trade between Vietnam and Sweden, Denmark, Norway reached 1.08 billion USD, of which Vietnam's exports reached 650.36 million USD, an increase of 3.76% and imports reached 430.91 million USD, an increase of 8.37% over the same period in 2023. Regarding investment, Northern European countries currently have 337 investment projects in Vietnam with a total capital of about 2.91 billion USD.

Although import-export turnover is growing, the Vietnam Trade Office in this market said that many new policies have an impact on trade with Vietnam. Specifically, Nordic countries often have policies to achieve EU goals sooner than other countries. Among them, the general principles and standards regulating manufacturers' responsibilities for textiles and garments from Nordic countries need to be taken into account by businesses

According to the Office, the Committee for Cooperation on Sustainable Development in the Nordic region held a meeting in February 2024 in Stockholm, Sweden agreed to introduce a common principle and standard regulating the responsibilities of producers toward textiles and garments.

The main goal of the regulations is to reduce the large volume of clothing and textiles consumed in the Nordic region. The fashion and textile industry is one of the world's most polluting industries, accounting for 8-10% of global greenhouse gas emissions, and people living in Northern Europe consume more textiles than the average level in the world.

In addition, Nordic countries also want to promote the textile industry in a more sustainable direction, solving problems related to textile waste exported to low-income countries outside the EU for landfill.

Ms. Nguyen Thi Hoang Thuy, Commercial Counselor in Sweden, concurrently responsible for the Nordic countries, said expansion policies of the Nordic countries prove that these countries are always at the forefront of climate change issues and environmental protection. Sweden has decided to double climate aid to 15 billion SEK (equivalent to about 1.54 billion USD) by 2025, Denmark is also promoting green investment, Norway will support 14 billion NOK (equivalent to about 1.54 billion USD) by 2025 (equivalent to about 1.49 billion USD) for developing countries by 2026 to support climate change and promote green technology, transitioning to renewable, circular and sustainable solutions.

Furthermore, Northern European consumers are increasingly inclined towards nature, consuming organic foods; Environmentally friendly products, which can be recycled and reused. It is forecast that by 2030, organic food consumption in the Northern European region will increase three times as much as it is currently...

Therefore, the Vietnam Trade Office in Sweden, concurrently in charge of Northern European countries, recommends that Vietnamese businesses need to pay attention to shifting production in line with world trends in the near future.

In addition, Ms. Nguyen Thi Hoang Thuy informed that Vietnam's export activities to this market in the last 6 end-year months may be suffered from disadvantages such as economic difficulties in along with the escalation of inflation, interest rates, and unemployment rates. Northern European households have tightened their belts and reduced spending even during the summer vacation months. Many industries are facing difficulties such as construction, furniture trading, clothing, footwear...

Besides, the currencies of these countries, especially Sweden, are currently at record lows compared to the euro and US dollar. The weak currency has made imported goods more expensive. At the same time, domestically produced goods become more competitive compared to imported goods. This could promote preference for domestic products and reduce the need for imports from other countries.

In addition, political conflicts and wars in some regions of the world have pushed up international transportation costs, escalating the price of products exported from Vietnam, reducing competitiveness in the Northern European market.