Vietnam Free Trade Agreement Has a Big Impact on Bike Sector
The free trade agreement between the EU and Vietnam was signed not long back. The EU Council accepted the EU-Vietnam trade and investment agreements, with the help of their signature and conclusion. The deal is ought to have a big impact on Vietnam micro mobility, and especially on the e- bike sector as the role of China has diminished because of anti-dumping measures.
It’s believed that Vietnam’s role in the supply for parts along with complete e- bikes will grow quickly. Correspondingly, since the country is by now considered a leading supplier of Cambodia where the production of bikes is also on the rise.
Current Trade Agreements
Vietnam benefits from a special trade arrangement by the EU. Products exported from Vietnam to Europe will abide to the local rules. These rules stipulate that 50% of the ex-works price of the e-bikes exported to Europe should be made with components manufactured in Vietnam.
Though, there are removed bi-lateral cumulation rules applying here. They state that parts introduced from Europe should be fitted on Vietnam made e-bikes, are considered local. It boils down to the fact that EU made parts enhance value to make local content much easier to reach the local content and with that the rules by the exported e-bikes from Vietnam.
Companies from the e-bike and bicycle industry which invested in Vietnam are KMC, Astro, Kenda, Bohle/Schwalbe, DDK and A&J.
Eliminating Custom Duties
The trade agreement will disregard all custom duties on goods that were traded between the two sides, fully respecting Vietnam’s growth needs. The agreement also comprises precise provisions for removing technical obstacles, like those in the automobile sector. EU companies can also participate in bids for procuring tenders in Vietnam on an equal footing with local companies.
The Importance of Vietnam
Vietnam is the second largest trading partner of the EU in ASEAN after Singapore. While EU investment in Vietnam was just modest in the past, a growing count of European companies are creating a hub for serving the Mekong. The major EU imports from Vietnam are telecom equipment, footwear, furniture, textiles and bike products. The EU mostly exports to Vietnam goods like transport equipment, food and beverages, and chemicals.
In three or so decades, Taiwan is a major foreign investor in Vietnam. In diverse sectors, it invested in around 4,000 companies. A number of them are in some way connected with the industry association of Taiwan. Some industries, such as the bicycle industry, have their own departments. Recently around 30 Taiwanese bicycle companies, like KMC, Astro, Bohle/Schwalbe, Kenda, DDK and A&J. have production units in Vietnam. Majority of them are components makers, allocating their products to assemblers of bicycle in Cambodia.
The trade agreement has a lot to do with the increasing demand for Vietnam micro mobility, and the total value of the same will reach over $10,227 million by 2030.

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