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Vietnam exports are hurt by EU closing borders

The European Union’s decision to close its borders amid the Covid-19 pandemic could reduce Vietnam’s exports to it by up to 8 percent.

The Ministry of Industry and Trade made this estimate in a recent release after European leaders decide on March 17 to shut their borders for 30 days in an effort to slow the spread of the novel coronavirus.

Though the ban on entry does not apply to goods, the trade ministry expects safety measures in Vietnam’s second largest export market after the U.S. to slow down trade and consumption.

Cargo shipped by air would face challenges due to restrictions on flights while demand for some billion-dollar export items like textiles, footwear, computers, and smartphones would have lower demand, the ministry said.

Vietnamese exporters have expressed concern.

Pham Xuan Hong, chairman of the Ho Chi Minh City Association of Garments, Textiles, Embroidery and Knitting (AGTEK), said since the E.U. buys over 11 percent of Vietnam’s textile exports, the industry would be hit if buyers in the bloc stop placing orders.

Overall exports to Europe last year were worth $41.48 billion, down 1 percent from 2018, with the main items being textiles, footwear, machinery and agriculture produce, and Germany being the largest market.

Vietnam recorded a trade surplus of $26.6 billion.

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