Evaluating Vietnam-Germany trade in the context of the EVFTA: A trade indicator approach

This study evaluates the impact of the EU-Vietnam Free Trade Agreement (EVFTA) on bilateral trade between Vietnam and Germany, addressing a gap in empirical research despite Germany’s role as Vietnam’s largest EU trading partner. The research adopts a trade indicator approach, applying the Bilateral Revealed Comparative Advantage (BRCA), Trade Intensity Index (TII), and Trade Complementarity Index (TCI) to analyze structural changes in trade between 2015 and 2023. The findings show that Vietnamese export sectors with established competitiveness, including footwear, leather, and wood products, have achieved notable gains under the EVFTA framework. However, sectors such as processed foods and high-tech machinery demonstrate limited improvement due to production constraints, compliance challenges, and value chain integration issues. Moreover, the results highlight a declining trend in both trade complementarity and intensity, indicating that the positive effects of the EVFTA have not been sustained in the long term. These findings underscore the need for Vietnam to enhance domestic production capacity, improve regulatory alignment with EU standards, and adopt a more proactive export strategy to fully capitalize on the agreement. Strengthening these dimensions will not only sustain existing advantages but also foster diversification and resilience in Vietnam-Germany trade relations under the evolving EVFTA landscape.