News Article

EU-Vietnam Free Trade Agreement Coming; Bike Products Export to Grow

Laws & Regulations

BRUSSELS, Belgium – Next summer the European Union’s Free Trade Agreement with Vietnam (EVFTA) is expected to be signed. This was confirmed at the EVFTA workshop held earlier this month in Paris. It’s expected to spur Vietnam’s export of bicycle products by companies like KMC, Bohle/Schwalbe, Astro and DDK.

EU-Vietnam Free Trade Agreement Coming; Bike Products Export to Grow
EVFTA will result in EU’s elimination of all import taxes on made in Vietnam products within seven years. How that works out for products of your interest, check text. – Photo EU

With The Trans-Pacific Partnership stopped by President Trump, in which Vietnam among various other nations participated, the country is focusing on increasing its trade with Europe. Negotiations for EVFTA were already concluded in August 2015.

Since Vietnam and the European Union are working on finalizing the language and legal framework for the agreement. It is expected that the complete agreement document can be submitted to higher authorities for approval at the beginning of 2018. Dignitaries of both sides are expected to put signatures to the agreement as early as next summer.

Elimination of all import taxes

With EVFTA coming Vietnam’s government worked out an action plan which is focused on growing the country’s export to the EU’s 28 member states. This will be pushed by EU’s elimination of all import taxes on Vietnamese goods within seven years. Vietnam will do the same for the EU within 10 years.

For some goods like apparel and footwear, two of Vietnam’s key export products, will see tariffs cut upon the trade deal taking effect. For how this is to work out for numerous bicycle products like tyres, chains, frames and saddles can be checked.

For that search use the CN Code of the products of your interest.

More on what you need to know on EU trading with Vietnam is in the EVFTA Guide which is available for download on this page.
It’s expected that EVFTA will grow Vietnam’s exports to the EU by 26% up to 2025 to USD 42 billion (up from USD 33.1 billion in 2016).

Bike companies in Vietnam

Companies from the bicycle and e-bike industry which recently invested in Vietnam are (among others) KMC, Bohle/Schwalbe, Astro, Kenda and DDK. For Bohle/Schwalbe the new Vietnam facility, which has been built with its Korean partner, brings much needed extra production as demand for its Schwalbe tyres is growing year on year. Next to extra delivery capability the Vietnam facility also is offering Bohle the possibility to focus more on the company’s 2nd brand; Impac.

KMC’s in 2015 opened Vietnam facility produces 10 million chains a year of which some 9 million are shipped to motorcycle manufacturers. The remaining 1 million chains are sold to numerous OEM bike makers in the region which are focused on export to Europe.

Vietnam is also a major exporter of bicycle and e-bike frames. Some 600,000 alloy and carbon frames are exported from Vietnam. About 350,000 are shipped direct to bike makers in Europe. The rest goes to nearby bike makers in Cambodia where large scale makers like Strongman, A&J and Asama are located. Cambodian bike makers shipped close 1.3 million complete bikes to the EU countries in 2016. Next to alloy and carbon frames Vietnam also produces several hundred thousand steel bike frames of which also a big portion is shipped to Europe. Astro is one of the frame makers located in Vietnam that exports to Europe. The renowned Taiwan frame maker operates two facilities in Vietnam for the production of alloy and carbon frames.

DDK is among the bicycle and e-bike component makers operating facilities in Vietnam. The company recently opened a new factory in the country for the production of memory foam. DDK’s new memory foam offers the same characteristics of gel but weighs less, is less vulnerable to vandalism, and doesn’t get hot in the sun. According to DDK this trend to develop memory foam with these characteristics is driven by the European e-bike market.

Comment on this article