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Economy 
Vol. 12, No. 2, 120-129, 2025 

ISSN(E) 2313-8181/ ISSN(P) 2518-0118 
DOI: 10.20448/economy.v12i2.7421 

© 2025 by the authors; licensee Asian Online Journal Publishing Group 

 
 

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

 
Nguyen Minh Trang1  
Nguyen Thi Thu Ha2 

 

 
(Corresponding Author) 

 
1,2Diplomatic Academy of Vietnam. 
1Email: trangdav@gmail.com  
2Email: thuhanguyenthi.work@gmail.com  

 
Abstract 

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. 

 

Keywords: Bilateral trade, BRCA, EVFTA, Germany, TCI, TII, Vietnam. 

 
Citation | Trang, N. M., & Ha, N. T. T. (2025). Evaluating Vietnam-
Germany trade in the context of the EVFTA: A trade indicator 
approach. Economy, 12(2), 120–129. 10.20448/economy.v12i2.7421 
History:  
Received: 5 August 2025 
Revised: 25 August 2025 
Accepted: 1 September 2025 
Published: 16 September 2025 
Licensed: This work is licensed under a Creative Commons 

Attribution 4.0 License  
Publisher:  Asian Online Journal Publishing Group 

Funding: This study received no specific financial support. 
Institutional Review Board Statement: Not applicable. 
Transparency: The authors confirm that the manuscript is an honest, accurate, 
and transparent account of the study; that no vital features of the study have 
been omitted; and that any discrepancies from the study as planned have been 
explained. This study followed all ethical practices during writing. 
Data Availability Statement: The corresponding author may provide study 
data upon reasonable request. 
Competing Interests: The authors declare that they have no competing 
interests. 
Authors’ Contributions: Both authors contributed equally to the conception 
and design of the study. Both authors have read and agreed to the published 
version of the manuscript. 

 
Contents 

1. Introduction .................................................................................................................................................................................... 121 
2. Literature Review .......................................................................................................................................................................... 121 
3. Methodology ................................................................................................................................................................................... 122 
4. Results and Discussion ................................................................................................................................................................. 123 
5. Policy Implications ........................................................................................................................................................................ 127 
6. Conclusion ....................................................................................................................................................................................... 128 
References ............................................................................................................................................................................................ 128 
 

 
 

 

 

 

mailto:trangdav@gmail.com
mailto:thuhanguyenthi.work@gmail.com
https://creativecommons.org/licenses/by/4.0/
https://creativecommons.org/licenses/by/4.0/
https://www.doi.org/10.20448/economy.v12i2.7421
https://orcid.org/0009-0002-0041-6105


 
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Contribution of this paper to the literature 
This study contributes to the existing literature by being the first to apply comprehensive trade indicators 
(BRCA, TII, TCI) to analyze Vietnam-Germany bilateral trade under the EVFTA. The paper's primary 
contribution is documenting macro-level structural shifts beyond sectoral studies, offering a fuller 
understanding of this strategic partnership. 

 

1. Introduction 
The EU-Vietnam Free Trade Agreement (EVFTA) represents a significant step in Vietnam’s international 

economic integration strategy, aiming to broaden market access and promote institutional reforms in accordance 
with the European Union’s (EU) rigorous standards (WTO Center, 2023). Within this framework, Germany—
Europe’s largest economy and a pivotal member of the EU occupies a central role in Vietnam’s trade landscape. It 
functions as both a major bilateral trading partner and a vital entry point for Vietnamese exports into the wider 
European market (WTO Center VCCI, 2022). 

Despite Germany's strategic importance, bilateral trade between Vietnam and Germany has received limited 
attention in academic research, particularly with regard to empirical and quantitative analysis. Furthermore, 
qualitative evaluations of the EVFTA’s impact on Vietnam-Germany trade remain scarce, even though the 
agreement has been in force since August 2020. This study aims to bridge this gap by assessing changes in trade 
structure, trade balance, and two-way trade flows between the two countries. To support the qualitative findings, 
key trade indicators, including the Bilateral Revealed Comparative Advantage (BRCA), Trade Intensity Index (TII), 
and Trade Complementarity Index (TCI), are employed. The results reveal significant sectoral disparities in the 
ability to benefit from the EVFTA, with certain industries showing strong performance while others remain 
underdeveloped due to structural and regulatory constraints. 

The EVFTA, signed in June 2019 and ratified in August 2020, is considered one of Vietnam’s most 
comprehensive trade agreements, alongside the Comprehensive and Progressive Agreement for Trans-Pacific 
Partnership (CPTPP). In contrast to the former Generalized System of Preferences (GSP), the EVFTA offers broader 
and more sustainable trade advantages. Under the agreement, Germany committed to eliminating 99.2% of tariffs 
on Vietnamese goods within seven years, while Vietnam pledged to remove 98.3% of tariffs on German goods over 
ten years. Additionally, the EVFTA strengthens cooperation in customs procedures, e-commerce, public 
procurement, and protection of geographical indications, contributing to greater transparency and efficiency (WTO 
Center, 2023). 

Initial outcomes from the EVFTA are promising. Vietnam’s key export sectors, such as footwear, textiles, 
seafood, plastics, and fruits, have experienced considerable growth in the German market. Conversely, German 
exports of automobiles, machinery, and industrial inputs have gained broader access to Vietnam (Finance Magazine, 
2023). Between 2012 and 2022, Vietnam’s exports to the EU increased by an average of 10.5% annually, and imports 
rose by 6.4%. The agreement is estimated to have raised Vietnam’s GDP by 2-2.5% and boosted exports to the EU 
by 75%, while also stimulating institutional reform and enhancing the country’s investment environment (WTO 
Center, 2023). 

Vietnam and Germany established diplomatic relations in 1975, later upgrading to a strategic partnership in 
2011. Today, Germany stands as Vietnam’s largest EU trading partner, accounting for nearly 20% of Vietnam’s total 
exports to the EU. It is also a leading provider of official development assistance (ODA), with over USD 2 billion 
committed since 1990 through agencies such as KfW and GIZ (WTO Center, 2023). From 2001 to 2018, bilateral 
trade grew at an average annual rate of 14%, with a notable acceleration in trade volumes following the EVFTA’s 
entry into force. Against this backdrop, the present study offers a comprehensive assessment of Vietnam-Germany 
trade under the EVFTA and presents targeted policy recommendations aimed at strengthening economic 
cooperation between the two countries in the medium and long term. 
 

2. Literature Review 
The EU-Vietnam Free Trade Agreement (EVFTA) has been the subject of growing academic interest, 

particularly regarding its macroeconomic implications and sectoral impacts on Vietnam's trade relations with the 
European Union (EU). However, most studies have centered on Vietnam-EU trade as a whole or focused on specific 
sectors such as textiles, seafood, or agriculture. In contrast, Vietnam-Germany trade relations under the EVFTA, 
especially through the lens of trade indicators, remain significantly underexplored. Grumiller, Raza, Staritz, Grohs, 
and Plank (2020) using the ÖFSE Global Trade Model, assess the broader economic and social effects of the EVFTA 
on Vietnam. Their findings highlight both export expansion potential and structural weaknesses, calling for 
institutional reforms to maximize the agreement’s benefits. Similarly, Khoat and Cismas (2019) focus on the policy 
dimension, analyzing the EVFTA’s negotiation process and anticipated socio-economic impacts. Both studies 
underline the importance of regulatory alignment, supply chain readiness, and policy coordination in realizing long-
term trade benefits. 

Quantitative studies have employed trade models to evaluate the EVFTA's impact. Hoan (2021) uses trade 
indicators to show Vietnam’s revealed comparative advantage in several export sectors to the EU, although bilateral 
trade volume with individual EU members like Germany remains modest in scale. Huong and Phuong (2016) utilize 
sectoral trade indicators to reveal intra-industry trade characteristics, especially in machinery and electronics, 
emphasizing the need for deeper integration into EU supply chains. Gravity model-based studies offer mixed results. 
Ha (2024) finds limited short-term effects of the EVFTA on Vietnam’s exports, while Diep, Thao, and Thu (2018) 
identify significant export drivers, including GDP, population, and institutional quality, alongside negative impacts 
from geographical distance and technological gaps. These studies, while valuable, treat the EU as a homogenous 
block and overlook bilateral variations, particularly with high-potential partners like Germany. 

Sector-specific literature offers further nuance. For instance, Chung et al. (2024) and Hoang and Tan (2020) 
assess the EVFTA’s impact on seafood exports to the EU, revealing that while market access has improved, technical 
and quality-related barriers remain significant. Although informative, such studies focus narrowly on industry-



 
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specific outcomes and do not account for broader bilateral trade dynamics. Studies directly examining Vietnam-
Germany trade are comparatively limited. Tinh (2017) provides a general overview of bilateral economic relations 
and highlights the need for policy support to leverage German market opportunities. Thong et al. (2020) analyze 
price transmission in the pangasius value chain between Vietnam and Germany, uncovering inefficiencies and 
asymmetries in value distribution. Kiem, Nguyen, Le, and Tran (2025) apply the SMART model to Vietnam’s 
garment exports to Germany, showing competitive gains under the EVFTA but emphasizing the importance of rules 
of origin and certification compliance. 

However, a critical gap persists in the existing literature: there is a lack of comprehensive, indicator-based studies 
that assess the structure, intensity, and complementarity of Vietnam-Germany trade within the EVFTA framework. 
While Germany is Vietnam’s largest trading partner in the EU, accounting for nearly 20% of its exports to the bloc 
(WTO Center, 2023), most empirical research either generalizes EU-wide impacts or isolates sectoral case studies. 
Little attention has been given to how Vietnam's trade with Germany has evolved in terms of competitiveness, 
structural change, and long-term sustainability since the EVFTA’s entry into force. This study seeks to address that 
gap by employing a trade indicator approach focusing on the Bilateral Revealed Comparative Advantage (BRCA), 
Trade Intensity Index (TII), and Trade Complementarity Index (TCI) to evaluate Vietnam-Germany trade between 
2015 and 2023. By doing so, it contributes both a methodological and empirical advancement to the literature, 
providing a nuanced understanding of bilateral trade dynamics in the context of a new-generation free trade 
agreement. 
 

3. Methodology 
This study adopts a mixed-method approach, primarily based on the collection and synthesis of secondary data 

from official reports, legal documents, statistical sources, and academic literature both domestic and international. 
The research integrates qualitative analysis with a review of existing studies to ensure a comprehensive and objective 
assessment of the EVFTA’s impact on Vietnam-Germany trade relations, while also formulating appropriate policy 
recommendations. To support the qualitative analysis, a set of international trade indicators is employed to assess 
the current status, intensity, potential, and complementarity of bilateral trade between Vietnam and the Federal 
Republic of Germany during the 2015–2023 period (or the most recent year with complete data). The key trade 
indicators used include: 

Bilateral Revealed Comparative Advantage (BRCA): The BRCA index measures Vietnam’s revealed comparative 
advantage in specific product categories within the bilateral trade framework with Germany. It reflects Vietnam’s 
relative export competitiveness in a given commodity group. 

 
● X(ij,k): Export value of product k from country i (Vietnam) to country j (Germany). 

● X(ij): Total exports from country i (Vietnam) to country j (Germany). 

● X(wj,k): World export value of product k to country j (Germany). 

● X(wj): Total world exports to country j (Germany). 
If BRCA > 1, Vietnam has a comparative advantage in exporting that product to Germany. 
Trade Intensity Index (TII): The TII measures the degree of trade concentration between Vietnam and 

Germany, indicating whether Germany is a relatively more important trading partner for Vietnam (and vice versa) 
compared to the global average. Formula: 

 
● X(ij): Exports from country i (Vietnam) to country j (Germany). 

● X(iw): Total exports from Vietnam to the world. 

● X(wj): World exports to country j (Germany). 

● X(w): Total world exports. 
A TII > 1 indicates a relatively strong bilateral trade intensity. 
Trade Complementarity Index (TCI): The TCI evaluates the degree of alignment between Vietnam’s export 

structure and Germany’s import structure, serving as a proxy for the potential to develop mutually beneficial trade 
based on product complementarity. Formula: 

TCI (ij) = 100 - (1/2) × Σ|X(ik) - M(jk)| 

● X(ik): Share of product k in Vietnam’s total exports. 

● M(jk): Share of product k in Germany’s total imports. 
A TCI value closer to 100 indicates a higher degree of trade complementarity between the two countries. 
Data Sources: The data used in this study are drawn from the General Department of Vietnam Customs; UN 

COMTRADE; International Trade Centre (ITC); Eurostat… 
Table 1 presents the Harmonized Commodity Description and Coding System (HS), as issued by the World 

Customs Organization, to classify traded goods. The 99 chapters in the HS system are restructured into 19 broader 
commodity categories, based on the naming conventions and detailed descriptions of each chapter and group. This 
classification process aligns with the research objectives and follows the categorization methodologies of the General 
Department of Vietnam Customs and the European Commission. 
 
 
 
 
 
 



 
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Table 1. Classification of commodity groups. 

Group No. HS code range Commodity group description 

Group 1 HS01 - HS05 Live animals and animal products 

Group 2 HS06 - HS14 Vegetable products 
Group 3 HS15 - HS24 Processed food, beverages, and tobacco 
Group 4 HS25 - HS27 Mineral products and petroleum 
Group 5 HS28 - HS38 Chemical products 
Group 6 HS39 - HS40 Plastic and rubber products 
Group 7 HS41 - HS43 Leather products 
Group 8 HS44 - HS46 Wood and wood products 
Group 9 HS47 - HS49 Paper and pulp products 
Group 10 HS50 - HS56 Textile raw materials 

Group 11 HS57 - HS63 Textile and garment products 
Group 12 HS64 - HS67 Footwear, headgear, and related accessories 
Group 13 HS68 - HS70 Articles of stone, plaster, cement, ceramics, and glass 

Group 14 HS71 Pearls and precious metals 
Group 15 HS72 - HS83 Basic metal products 
Group 16 HS84 - HS85 Machinery, mechanical and electronic equipment 
Group 17 HS86 - HS89 Vehicles and transport equipment 
Group 18 HS90 - HS92 Optical instruments, clocks, musical and medical equipment 
Group 19 HS93 - HS99 Miscellaneous goods 

 

4. Results and Discussion 
4.1. Overview of Vietnam-Germany Trade Relations 

Between 2015 and 2023, merchandise trade between Vietnam and Germany exhibited a generally upward trend, 
despite fluctuations driven by global economic disruptions. Bilateral trade began at USD 8.91 billion in 2015 and 
increased steadily to USD 10.69 billion by 2018, reflecting an average annual growth rate of approximately 6.26%. 
The year 2018 marked a particularly strong expansion, with trade volume rising by over USD 1 billion compared to 
the previous year. Figure 1  illustrates the total bilateral trade between Vietnam and Germany from 2015 to 2023. 

The figure illustrates both the overall trade value and the annual growth rate, providing an overview of trade 
dynamics and fluctuations during the observed period. 
 

 
Figure 1. Vietnam-Germany merchandise trade value and growth rates, 2015-2024. 

Source: Author’s calculations based on ITC Trade Map data. 

 
However, this momentum was temporarily interrupted during 2019–2020. Trade volume fell by USD 426 million 

in 2019 and continued to decline to USD 9.99 billion in 2020, a cumulative drop of nearly USD 690 million from the 
2018 peak. This contraction was likely driven by global supply chain disruptions and demand shocks associated with 
the COVID-19 pandemic. A robust recovery followed in 2021 and 2022. Trade rebounded to USD 11.22 billion in 
2021, an increase of 12.3% year-on-year, and further climbed to USD 12.58 billion in 2022, marking the highest level 
during the period. However, 2023 saw another decline, with bilateral trade falling to USD 11.08 billion, a decrease 
of 11.9% from the previous year. This downturn may be attributed to inflationary pressures, increased logistics costs, 
and weakening demand across the European market. 

Over the full 2015-2023 period, total bilateral trade grew by 24.4%, from USD 8.91 billion to USD 11.08 billion. 
While periods of stagnation and decline occurred, particularly in 2018-2020 and again in 2023, the overall trend 
remains positive. Notably, the entry into force of the EVFTA in 2020 played a crucial role in accelerating trade, 
particularly between 2020 and 2022. The most significant annual growth spikes occurred in 2017-2018 (+11.8%), 
2020-2021 (+12.3%), and 2021-2022 (+12.1%), while contractions were observed in 2018-2019 (-4.0%), 2019-2020 



 
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(-2.6%), and 2022-2023 (-11.9%). These shifts underscore the cyclical and externally sensitive nature of bilateral 
trade dynamics. 

In terms of trade composition, Vietnam’s exports to Germany primarily consist of machinery, transport 
equipment, steel, and seafood, all of which have shown solid growth. On the import side, Vietnamese firms benefit 
from increased access to German high-tech equipment, industrial inputs, and consumer products facilitated by tariff 
reductions under the EVFTA. The trade relationship is characterized by high structural complementarity: Vietnam 
holds comparative advantages in agricultural products, light industry, and consumer goods, while Germany 
specializes in capital goods, heavy industries, chemicals, and pharmaceuticals. This complementarity has laid the 
foundation for sustained trade growth and deeper integration. Furthermore, German FDI in Vietnam has expanded 
significantly, with over 530 active projects and a total registered capital of USD 3.6 billion as of 2024. Prominent 
German firms such as Ziehl-Abegg, Kärcher, and Pearl Polyurethane Systems have increased their investment in 
Vietnam, underscoring strong investor confidence in the country’s economic potential and its emerging role in global 
supply chains (VietnamPlus, 2024). 
 

4.2. Assessment of Vietnam-Germany Bilateral Trade Using the Bilateral Revealed Comparative Advantage (BRCA) 
Index 

Using the Bilateral Revealed Comparative Advantage (BRCA) index as the primary analytical tool, this section 
evaluates the performance of Vietnam’s major export sectors to Germany during the 2015–2023 period, thereby 
offering insights into the dynamics of trade competitiveness in the context of the European Union-Vietnam Free 
Trade Agreement (EVFTA). 

Table 2 presents the BRCA index by product group for Vietnam’s exports to Germany during the period 2015-
2023. The table reorganizes the 99 HS chapters into 19 broader commodity categories, allowing the identification of 
sectors where Vietnam shows comparative advantages. 

 
Table 2. BRCA index by product group for Vietnam’s exports to Germany. 

Product Group (HS Code & Description) 2015 2016 2017 2018 2019 2020 2021 2022 2023 

HS01-HS05 (Live animals and animal products) 1.01 0.81 0.76 0.83 0.95 0.82 0.13 0.99 0.79 
HS06-HS14 (Vegetable products) 2.78 2.93 3.13 3.00 2.77 2.29 2.77 2.38 2.27 
HS15-HS24 (Processed food, beverages, and 
tobacco) 

0.58 0.60 0.71 0.77 0.35 0.65 0.63 0.47 0.58 

HS25-HS27 (Mineral products and petroleum) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 
HS28-HS38 (Chemical products) 0.13 0.13 0.11 0.10 0.06 0.05 0.05 0.04 0.04 
HS39-HS40 (Plastic and rubber products) 5.71 0.73 0.81 0.76 0.83 0.84 0.95 0.83 0.87 
HS41-HS43 (Leather products) 5.10 4.47 5.20 5.35 6.34 6.29 5.35 5.84 6.61 
HS44-HS46 (Wood and wood products) 1.18 1.05 0.99 1.00 1.17 1.23 1.06 0.95 0.96 
HS47-HS49 (Paper and pulp products) 0.02 0.02 0.04 0.05 0.05 0.05 0.04 0.00 0.05 
HS50-HS56 (Textile raw materials) 0.19 0.13 0.13 0.22 0.29 0.49 0.75 0.57 0.81 
HS57-HS63 (Textile and garment products) 3.37 2.45 3.22 2.26 3.54 2.36 2.96 3.43 3.68 

HS64-HS67 (Footwear, headgear, and related 
accessories) 

11.33 1.25 14.17 12.64 13.20 11.60 11.60 13.40 13.20 

HS68-HS70 (Stone, cement, ceramic, and glass 
products) 

0.39 0.32 0.20 0.17 0.21 0.53 0.52 0.46 0.42 

HS71 (Pearls and precious metals) 0.09 0.12 0.12 0.09 0.10 0.07 0.06 0.12 0.14 
HS72-HS83 (Basic metal products) 0.31 0.28 0.26 0.30 0.34 0.16 0.36 0.41 0.49 
HS84-HS85 (Machinery and electronic equipment) 1.73 1.37 1.56 1.70 1.55 1.51 1.39 1.46 1.39 

HS86-HS89 (Vehicles and transport equipment) 0.14 0.12 0.11 0.12 0.16 0.17 0.17 0.17 0.17 
HS90-HS92 (Optical instruments, clocks, musical 
& medical equipment) 

0.26 0.26 0.26 0.24 0.27 0.45 0.45 0.45 0.49 

HS93-HS99 (Miscellaneous goods) 0.94 0.82 0.72 0.88 0.98 1.12 1.48 1.21 1.21 
Source: Author’s calculations based on ITC Trade Map and UN TRADECOM data. 

 
The product group classified under HS64-HS67 (Footwear, Headgear, and Related Accessories) exhibited the 

highest and most consistent BRCA values throughout the analysis period. Starting at 11.34 in 2015 and reaching a 
peak of 14.17 in 2017, the sector experienced a temporary decline to 1.25 in 2016. This deviation may be attributed 
to external disruptions, including Brexit-induced uncertainty, temporary shifts in procurement, and subdued 
investment flows. Notwithstanding this anomaly, the sector demonstrated rapid recovery, subsequently maintaining 
BRCA levels well above the threshold of 1.0, underscoring Vietnam’s enduring comparative advantage and structural 
competitiveness in this product group within the German market. 

Similarly, the HS41-HS43 (Leather and Leather Products) group consistently recorded BRCA values exceeding 
4, culminating at 6.61 in 2023. This performance indicates stable competitiveness and suggests long-term export 
potential, particularly in light of EU demand for high-quality leather goods. The persistence of this comparative 
advantage highlights the strategic relevance of continued investment in quality control, branding, and market 
diversification. 

HS44-HS46 (Wood and Wood Products) has shown a notable upward trend in comparative advantage, with 
BRCA values rising from 0.99 in 2017 to 1.30 in 2023. The consistent progression above the threshold of 1.0 from 
2019 onward suggests that Vietnam is gaining market share in Germany’s wood product segment. This improvement 
is likely the result of increased processing capacity, compliance with EU sustainability standards, and effective 
implementation of national forestry certification policies. 

A similar trajectory is observed in HS93-HS99 (Miscellaneous Manufactured Articles). Initially characterized by 
sub-threshold BRCA values (e.g., 0.95 in 2015 and 0.82 in 2016), the group witnessed a marked increase, achieving 
a BRCA of 1.22 in 2020 and peaking at 1.48 in 2022. Although this category encompasses a broad range of items, its 



 
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improved competitiveness may be attributed to niche exports such as sports equipment, non-lethal defense items, 
and handicrafts sectors that benefit from cultural appeal and artisanal value. These findings suggest considerable 
room for export diversification and targeted industrial support. 

The HS57-HS63 (Textiles and Garments) category, traditionally a core export strength for Vietnam, revealed a 
consistent decline in BRCA values over the period. From a high of 3.37 in 2015, the index fell to 2.45 in 2016 and 
further declined to 1.81 by 2023. Although still indicative of a comparative advantage, the downward trend reflects 
intensifying competition from regional exporters such as Bangladesh and Cambodia, as well as increasing 
sustainability and traceability requirements in the EU apparel market. 

Similarly, HS06-HS14 (Vegetable Products) declined from a BRCA of 2.93 in 2016 to 2.27 in 2023. This 
weakening may be linked to structural barriers, including limited value addition, seasonal supply volatility, and the 
tightening of EU sanitary and phytosanitary (SPS) regulations. Despite retaining competitiveness, the trend 
indicates a need for strategic intervention to sustain market access and enhance product quality. 

Figure 2 illustrates the BRCA index of Vietnamese export product groups to Germany during 2015-2023, 
highlighting only those groups with a comparative advantage (BRCA > 1). 

 

 
Figure 2. BRCA Index of Vietnamese export product groups with BRCA > 1 (2015-2023). 

 Source: Author’s calculations based on ITC Trade Map and UN TRADECOM data 

 
Several product groups consistently recorded BRCA values below 1, suggesting a lack of comparative advantage 

and limited export potential in the short to medium term. 
● HS25-HS27 (Mineral Products and Petroleum) demonstrated minimal contribution to bilateral trade, with 

BRCA scores close to zero. Germany’s transition away from fossil fuels and its strict environmental standards 
likely constrain Vietnam’s competitiveness in this domain. 

● HS28-HS38 (Chemical Products) similarly exhibited low BRCA values, reflecting Vietnam’s limited capacity 
in producing and exporting high-value-added or refined chemical goods. 

● HS50-HS56 (Raw Textile Materials) remained below the threshold, underscoring Vietnam’s position primarily 
as a garment assembler rather than a producer of upstream textile inputs. This reflects continued dependence 
on imported fabrics and materials, particularly from China and South Korea. 

● HS84-HS85 (Machinery and Electrical Equipment) displayed volatility in BRCA values, with no sustained 
competitive edge. While Vietnam is increasingly engaged in electronics assembly, the lack of technological 
depth and insufficient integration into advanced segments of global value chains remain critical impediments. 

Table 3 presents the trade intensity index (TII) between Vietnam and Germany from 2015 to 2023, highlighting 
the relative importance of each country as a trading partner compared to their global trade. 
 
Table 3. Trade intensity between Vietnam and Germany. 

Year Vietnam’s exports to Germany Germany’s exports to Vietnam 

2015 3.56 0.24 
2016 3.04 0.19 
2017 2.41 0.18 
2018 2.23 0.20 
2019 1.75 0.18 
2020 1.46 0.16 
2021 1.43 0.16 
2022 1.61 0.15 
2023 1.40 0.16 

Source: Author’s calculations based on ITC Trade Map and UN TRADECOM data. 

 
 



 
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4.3. Assessment of Vietnam-Germany Bilateral Trade Using the Trade Intensity Index 
The trade intensity data between Vietnam and Germany from 2015 to 2023 reveal a volatile yet strategically 

significant picture of bilateral commerce. Vietnam’s export intensity to Germany experienced a notable decline from 
3.57 in 2015 to 1.40 in 2023. Notably, the sharpest decrease occurred during 2015-2019 (from 3.57 to 1.76), 
potentially reflecting Vietnam’s diversification of export destinations and a reduced reliance on the German market, 
as other major economies such as the United States, China, and Japan became increasingly attractive. Additionally, 
intense competition in Vietnam’s key export sectors (e.g., textiles and footwear) from other ASEAN countries, along 
with the EU’s stringent technical standards, contributed to this declining trade intensity. Nevertheless, a slight 
rebound in 2022 when the index rose to 1.61 may indicate an initial positive response to the EU-Vietnam Free Trade 
Agreement (EVFTA), which came into force in 2020. Conversely, Germany’s export intensity to Vietnam remained 
consistently low throughout the period, fluctuating narrowly between 0.15 and 0.24. This suggests that, despite the 
high quality of German goods, they accounted for only a small share of Vietnam’s total imports. The dominance of 
alternative suppliers such as China, South Korea, and Japan with their geographic proximity and competitive pricing 
likely contributed to this trend. 

Overall, the bilateral trade intensity index reflects Vietnam’s persistent trade surplus with Germany, with export 
intensity values often 7 to 20 times higher than those for imports. Germany continues to be a high-potential market 
for Vietnamese products, especially in sectors such as footwear, textiles, furniture, and electronic components. 
However, the low import intensity from Germany signals an underexploited dimension of the partnership, 
underscoring the strategic need to rebalance trade or deepen supply chain linkages with high-tech partners like 
Germany. 

Table 4 presents the trade complementarity index (TCI) between Vietnam and Germany from 2015 to 2023, 
reflecting the degree of compatibility between Vietnam’s export structure and Germany’s import demand. 
 

Table 4. Trade complementarity index (TCI) between Vietnam and Germany (2015-2023). 

 Year TCI (%) 

 2015 46.32 

 2016 45.34 

 2017 45.83 

 2018 46.62 

 2019 46.30 

 2020 44.42 

 2021 44.56 

 2022 44.11 

 2023 43.92 

Source: Author’s calculations based on ITC Trade Map and UN TRADECOM data. 

 

4.3.1. Assessment of Vietnam-Germany Bilateral Trade Using the Trade Complementarity Index (TCI) 
The Trade Complementarity Index (TCI) between Vietnam and Germany during the period 2015-2023 

fluctuated within the range of 44-47, indicating a moderate level of complementarity in the trade structures of the 
two countries. The years 2018 and 2019 recorded the highest TCI values, at 46.62 and 46.30 respectively, suggesting 
a strong alignment between Vietnamese export profiles and German import demand. This period reflects an optimal 
match in trade composition, implying that Vietnam effectively supplied product categories corresponding to 
Germany’s import needs particularly in sectors such as textiles, electronic components, and mechanical equipment. 

However, since 2020, the TCI has exhibited a slight downward trend, declining from 45.45 to 43.92 in 2023, the 
lowest level in nearly a decade. This pattern implies a weakening alignment between Vietnam’s export structure and 
Germany’s evolving import demand. Possible explanations include post-COVID-19 global supply chain 
realignments, Germany’s shifting sourcing strategies toward more competitive markets, or structural changes in 
Vietnam’s major export sectors. The declining TCI trend signals a potential loss of trade synergy, which, if sustained, 
could undermine Vietnam’s ability to fully leverage trade advantages and optimize bilateral trade relations with 
Germany. 
 

4.4. Qualitative Impacts of the EVFTA 
First, under the influence of the EVFTA, many of Vietnam’s traditional export sectors have not only sustained 

but also strengthened their comparative advantages in the German market, suggesting that the agreement has had 
a positive effect on bilateral trade. Sectors with pre-existing advantages, such as leather products (HS41-HS43), 
maintained a high RCA above 5, largely due to preferential tariff treatment. Similarly, footwear and headgear (HS64-
HS67) experienced a notable increase in RCA, from 11.65 in 2020 to 13.21 in 2023, reinforcing their competitive 
position. The textile and garment sector (HS57-HS63) also witnessed a strong recovery after a period of decline, 
attributed to the favorable conditions created by the EVFTA. Meanwhile, the wood and wood products group (HS44-
HS46), which previously had an RCA below 1, recorded an increase above 1, indicating a positive structural shift. 
These findings confirm that the EVFTA has played a significant role in enhancing the competitiveness of Vietnamese 
exports in the German market particularly in traditional sectors such as textiles, leather, footwear, and wood 
products thereby laying a stronger foundation for Vietnam to expand and exploit the European market more 
effectively. 

In addition to these clearly benefiting sectors, a number of product groups have not shown any noticeable 
improvement in comparative advantage, highlighting the selective nature of the agreement's impact. Several 
industries maintained RCA values below 1 both before and after the EVFTA took effect, indicating that the 
agreement’s support was not sufficient to trigger structural change. Notably, sectors such as processed food, beverages, 
and tobacco (HS15-HS24), and high-tech machinery, transport equipment, and optical instruments (HS84-HS92), have yet 



 
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to capitalize on the opportunities offered by the EVFTA, primarily due to technological limitations and low added 
value. The mineral and petroleum group (HS25-HS27), in particular, consistently lacked comparative advantage 
throughout 2015-2023—largely due to limited preferential treatment under the agreement and Vietnam’s weak 
export capacity in this domain. This reality suggests that the EVFTA has primarily accelerated growth in sectors 
with an existing foundation and the capacity to meet EU standards, while its effects remain muted in structurally 
weaker industries. To more effectively leverage the EVFTA, Vietnam must invest in strengthening its production 
capacity, improving compliance with technical standards, and developing targeted industrial strategies aligned with 
long-term trade goals. 

Third, while the EVFTA was initially anticipated to deliver a substantial boost to Vietnam-Germany trade 
relations, its actual impact appears to be transient and lacking in long-term sustainability. The early momentum in 
export growth quickly plateaued due to a confluence of external pressures, including intensified regional competition, 
the COVID-19 pandemic, and geopolitical disruptions across Europe. Trade indices such as the Trade 
Complementarity Index (TCI) and Trade Intensity Index (TII) have either declined or fluctuated, suggesting that 
the EVFTA has not yet induced a structural transformation in bilateral trade patterns. This limited impact can 
largely be attributed to Vietnam’s internal constraints particularly weak production capacity, underdeveloped 
logistics infrastructure, and insufficient alignment with the EU’s stringent technical, environmental, and regulatory 
standards. 

In this context, the EVFTA has primarily served as a legal and institutional framework to facilitate trade rather 
than acting as a transformative catalyst for Vietnam-Germany trade relations. To fully harness the benefits of the 
agreement, Vietnam must focus on improving its competitive capacity, enhancing supply chain resilience, and 
increasing market accessibility by complying more comprehensively with EU norms. Developing a long-term export 
strategy tailored to the evolving global trade landscape is also imperative. Several structural factors contribute to 
the muted impact of the EVFTA on bilateral trade. Germany’s import demand has increasingly shifted toward high-
tech, green, and sustainable product sectors in which Vietnam still faces significant gaps. Moreover, the country’s 
export structure remains concentrated in traditional, labor-intensive goods with limited innovation. The growing 
competition from both intra-EU and Asian suppliers further erodes Vietnam’s market share in Germany. Without 
timely structural adjustments, quality upgrading, and responsiveness to sustainable consumption trends, Vietnam 
risks underutilizing the strategic advantages offered by the EVFTA. Therefore, the long-term success of the 
agreement requires more proactive engagement from both enterprises and policymakers in Vietnam. 
 

5. Policy Implications 
Before presenting policy recommendations and strategic solutions, this study provides a synthesized SWOT 

analysis, highlighting Vietnam’s strengths, weaknesses, opportunities, and threats in order to establish a solid 
foundation for more appropriate and effective directions in the trade relationship with Germany. 

Strengths: Vietnam demonstrates several strengths in its trade engagement with Germany. The country 
possesses key export sectors that align well with German consumer preferences, such as wood products, textiles and 
garments, footwear, coffee, and tropical fruits. The quality of Vietnamese goods has significantly improved over the 
years, gradually gaining acceptance in demanding markets like the EU, particularly Germany. Many Vietnamese 
enterprises have also made long-term, methodical investments to develop high-standard products that meet strict 
quality and design requirements. Additionally, Vietnam is actively promoting investment in high-tech industries, 
especially in underdeveloped areas such as fruit and seafood processing, with the aim of enhancing both product 
quality and export value. 

Weaknesses: Despite its export potential, Vietnam faces several weaknesses that hinder its trade performance 
with Germany. Product quality and technical standards remain inconsistent, making it challenging to meet the 
stringent requirements of the German and broader EU markets. Outdated processing technologies persist, resulting 
in exports that are often raw or semi-processed, thus limiting value addition. Moreover, significant limitations exist 
in traceability and international certification, particularly among small and medium-sized enterprises (SMEs). High 
logistics costs and inadequate infrastructure further reduce Vietnam’s price competitiveness and delivery efficiency. 
Finally, weaknesses in branding and market access, along with a lack of effective marketing strategies and limited 
understanding of German consumer preferences, continue to constrain Vietnam’s ability to expand its market 
presence. 

Opportunities: The implementation of the EVFTA has opened up a range of promising opportunities for 
Vietnam–Germany trade relations. Since the entry into force of the EVFTA, there has been a noticeable increase in 
German investment flows to Vietnam, with growing interest in sectors such as manufacturing, technical services, 
ICT, banking, and insurance. The expanding Vietnamese and broader Asian communities in Germany also provide 
a stable consumer base that favors culturally distinctive products such as food, household goods, and apparel (WTO 
Center). Moreover, as the largest economy in the EU and a major logistics hub, Germany serves as a strategic 
gateway for Vietnamese goods to penetrate deeper into the European market, expand their scale, and diversify 
distribution channels (WTO Center, 2023). 

Threats: Vietnam-Germany trade faces several significant threats that could hinder further development. 
Vietnamese export products such as wood, textiles, and footwear are required to meet strict standards regarding 
chemical safety, CE certification, labor regulations, environmental protection, and corporate social responsibility. 
Many Vietnamese companies still face difficulties in complying with these demanding criteria. Moreover, to receive 
tariff preferences under the EVFTA, products must satisfy the EU’s rules of origin. This requires transparent supply 
chains and a high percentage of locally sourced content, which remains a major challenge for numerous industries 
(Finance Magazine, 2023). In addition, the long geographical distance between Vietnam and Germany results in high 
transportation, storage, and logistics costs, limiting Vietnam’s ability to compete with countries located closer to the 
European market, such as those in Latin America or North Africa. Furthermore, external factors such as geopolitical 
tensions, energy instability, disruptions in maritime transport, and changes in EU trade policies may also negatively 
influence the dynamics of trade between the two countries. 



 
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5.1. Policy Recommendations for the Government and Relevant Ministries 
The Government and relevant ministries should formulate a comprehensive international trade and investment 

development strategy with clearly defined general and specific objectives. Particular emphasis should be placed on 
attracting technological investment from Germany and promoting the production and export of goods in which 
Vietnam has a comparative advantage in the German market. Second, the Ministry of Industry and Trade should play 
a central coordinating role in intensifying the dissemination and communication of the EVFTA’s content to the 
business community, thereby enabling firms to better understand and effectively leverage the benefits provided by 
the agreement. Additionally, it is crucial to boost trade promotion activities, business matchmaking, and economic 
cooperation initiatives between the two countries. Furthermore, the Government should implement practical support 
mechanisms to assist enterprises in accessing market information, understanding legal frameworks, identifying 
reliable partners, and adapting to the business culture of Germany. These measures would enhance firms’ capacity 
to meet import market standards and improve their overall competitiveness. Finally, strengthening diplomatic and 
economic cooperation will help position Vietnam as a strategic gateway linking Germany with ASEAN, while also 
enabling Germany to serve as a central node connecting Vietnam to the broader European market. In particular, 
bilateral dialogues should be promoted on a sectoral basis, focusing on innovation and high-tech transfer two critical 
pillars for fostering sustainable export expansion to Germany in the coming years. 
 
5.2. Recommendations and Solutions for the Business Sector 

Small and medium-sized enterprises (SMEs) need to enhance their competitiveness as a key component in the 
strategy to expand into the German market. Enterprises must invest systematically in production technology, quality 
management, and improve their capacity to meet the technical standards and strict rules of origin required by the 
European market (Vu, 2024). Second, improving logistics systems, reforming customs procedures, and reducing 
transportation costs will help enhance supply chain efficiency, ensuring that goods arrive in Germany on time and 
with assured quality. Third, strengthening public-private coordination mechanisms, especially in market linkage and 
investment promotion activities, will create favorable conditions for businesses to effectively utilize government 
support. Fourth, enterprises should actively participate in trade fairs and international investment promotion 
conferences to meet partners, expand networks, and seek export opportunities. Fifth, thoroughly researching 
German legal systems, culture, and consumer habits will help businesses develop appropriate strategies and avoid 
non-tariff barriers. Finally, companies should maintain regular contact with the Vietnam Trade Office and Embassy 
in Germany for timely consultation, support, and updates on useful information to facilitate transactions and 
commercial cooperation with German partners. 

To enhance the effectiveness of Vietnam-Germany cooperation at the regional level, particularly in the context 
of the ASEAN-EU comprehensive strategic partnership, several specific policy orientations should be implemented. 
Vietnam can leverage its role as a bridge between ASEAN and the EU, with Germany as a key partner, to promote 
interregional initiatives on digital transformation, green development, and sustainable trade. This not only 
strengthens Vietnam's position in ASEAN but also increases Germany's influence in the Asia-Pacific region. 
Trilateral cooperation programs among Vietnam, Germany, and another ASEAN or EU country should be 
encouraged, especially in areas such as vocational training, technology transfer, and sustainable agriculture. This 
cooperation model will provide a foundation to expand bilateral influence to the regional level. Vietnam and Germany 
should collaborate to promote the harmonization of technical and trade standards between ASEAN and the EU, 
supporting businesses in both regions to access partner markets more effectively through the standardization of 
export procedures, quality standards, and traceability systems. Both countries should actively participate in regional 
initiatives such as the Global Gateway or the EU’s Indo-Pacific Strategy to attract investment, technology, and 
financial resources for sustainable infrastructure development, thereby contributing to deeper regional integration 
between ASEAN and the EU. 
 

6. Conclusion 
This study has evaluated the impact of the EVFTA on bilateral trade relations between Vietnam and Germany 

through a qualitative lens, supplemented by key trade indicators such as BRCA, TII, and TCI. The findings reveal 
that the agreement has generated positive shifts in several of Vietnam’s core export sectors, including footwear, 
leather goods, wood products, and textiles by enhancing their comparative advantage and expanding market share 
in the German market. Nonetheless, the effects of the EVFTA remain selective and insufficiently sustainable, as 
numerous industries have yet to effectively capitalize on the preferential benefits due to constraints in technology, 
compliance with technical standards, and production capacity. The recent downward trends in trade complementarity 
and trade intensity indices suggest that the bilateral trade structure has not undergone a substantial transformation, 
contrary to initial expectations. By integrating qualitative assessments with trade metrics, this study contributes an 
additional perspective to the relatively underexplored field of Vietnam-Germany trade relations. However, the 
research is limited by its reliance on secondary data and the absence of robust quantitative tools such as gravity 
models or firm-level surveys. Future research should address these limitations by adopting mixed-method 
approaches, combining econometric modeling with empirical case studies or enterprise-level data. Such 
enhancements will not only deepen academic understanding but also offer practical insights for policymakers in 
optimizing the strategic implementation of trade agreements between Vietnam and Germany. 
 

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