Vietnam has become the Czech Republic's largest trading partner within ASEAN. Both nations have also strengthened cooperation across various fields. Vietnam continues to create favorable conditions for foreign investors, including Czech enterprises, to conduct business in the country. 

The Czech Republic values its relationship with Vietnam, designating Vietnam as the only Southeast Asian nation among its 12 key markets for foreign trade, as outlined in the Czech Republic's new Export Strategy. The Czech Republic was one of the first EU countries to ratify the EU-Vietnam Investment Protection Agreement (EVIPA) and is actively encouraging other EU countries to finalize ratification soon. 

The economic structures of Vietnam and the Czech Republic are complementary, offering mutual benefits from enhanced bilateral cooperation. Vietnam excels in producing goods that the Czech Republic lacks or produces in limited quantities, such as light industrial products and agricultural, forestry, and seafood products. Meanwhile, the Czech Republic has strengths in heavy industry. 

Bilateral trade turnover has grown significantly over the past five years (2019–2023). Vietnam's top export categories to the Czech Republic include phones, tablets, computers, and electronic products, which typically account for a large share of Vietnam's exports to the Czech Republic—around 40%, peaking at 55.47% in 2021. This reflects the rising demand for electronic products to support online learning and work in the Czech Republic. Following electronics, major export categories include leather and footwear (16%), mechanical machinery, equipment, and spare parts (8.62%), and textiles (6.69%). 

A common characteristic is that most of these products are manufactured by foreign enterprises in Vietnam, reflecting the general export structure of the country. Top export items produced by domestic Vietnamese enterprises for the Czech market include rubber (1.51%), plastics (1.41%), steel (1.39%), toys (1.37%), and furniture (0.91%). 

Vietnam's exports of agricultural, forestry, and fishery products to the Czech Republic have seen continuous growth in recent years, especially after the EU-Vietnam Free Trade Agreement (EVFTA) came into effect on August 1, 2020. This agreement eliminated most import tariffs on these products. However, the export volume from domestic enterprises remains relatively low compared to that of foreign-invested enterprises in Vietnam. 

Both Vietnam and the Czech Republic share the strategic advantage of their geographic locations within their respective regions. The Czech Republic can use Vietnam as a gateway to access the ASEAN market, with the EVFTA offering Vietnam more favorable trade and investment conditions compared to other ASEAN countries. Conversely, Vietnam can utilize the Czech Republic as a hub to distribute goods and services to other EU member states, particularly neighboring countries such as Germany, Poland, Slovakia, and Austria. 

One significant factor contributing to the potential for enhanced economic and trade cooperation between Vietnam and the Czech Republic is the Vietnamese community in the Central European nation. 

In terms of population ratio, the Vietnamese community in the Czech Republic is the most densely distributed and widespread across all regions, from cities to rural areas. Most members of this community are engaged in retail, restaurant operations, import-export, and distribution businesses of various scales. This extensive and robust distribution network provides Vietnamese domestic enterprises with relative ease in finding suitable partners based on their scale and development stage when exporting goods to the Czech Republic. 

The leading export category from the Czech Republic to Vietnam is mechanical machinery, accounting for 15% of the Czech Republic’s total exports to Vietnam in 2021. This is followed by plastics (13.20%), electronics (12.41%), automobiles and parts (11%), pharmaceuticals (6.22%), precision instruments and medical equipment (5.39%), and weapons (5.11%). These industries represent key strengths of the Czech Republic and are reflected in Czech investments in Vietnam, which are predominantly in mechanical and engineering fields, such as the Viet Tiep lock factory and the Viet Tiep hospital. 

On October 7, 2022, the Czech company Skoda Group signed a business cooperation agreement with Vietnam’s Thành Công Group to gradually distribute, assemble, and manufacture Czech cars in Vietnam. These vehicles will also be exported from Vietnam to other ASEAN member states. 

Additionally, the Czech Republic is a net energy exporter with expertise in thermal power production and technology. Many Czech companies have successfully partnered with Vietnamese counterparts to supply machinery, equipment, and technologies for Vietnam’s thermal power sector. Alongside thermal power, the Czech mining industry is also highly developed. 

Despite these favorable conditions, several challenges must be addressed to enhance the effectiveness of bilateral trade and investment cooperation. These challenges include natural conditions, external factors, and policy or regulatory barriers. 

From a geographical perspective, Vietnam and the Czech Republic are relatively distant from each other. Like Austria and Slovakia, the Czech Republic is landlocked, requiring goods to be transported through ports in Germany or the Netherlands. Even under normal circumstances, this results in longer transit times and higher costs compared to trade within the same region. 

The situation has worsened due to the COVID-19 pandemic, the conflict in Ukraine, the resulting energy crisis, and high inflation, all of which have caused a dramatic surge in logistics costs. 

At the peak of the pandemic in 2021, transportation and logistics costs for each container shipped from Vietnam to the Czech Republic increased by 4–5 times or more. This significant rise reduced profits and created difficulties for importers and distributors. Although costs have since decreased compared to the peak period, they remain higher than pre-pandemic levels. 

Additionally, during the two years when the EU countries, including the Czech Republic, imposed economic and border closures to control the pandemic, high import-export costs led many importers to reconsider their strategies. Some shifted to sourcing goods from geographically closer countries, while others explored local production options. This unfavorable trend, if prolonged, could hinder efforts to boost exports. Solutions such as establishing direct flight routes, investing in local production facilities, or building bonded warehouses require considerable time, resources, and supportive policies. 

From an objective perspective, apart from goods produced by foreign-invested enterprises in Vietnam, such as phones, shoes, and apparel—already popular in the Czech market—most products exported by domestic Vietnamese enterprises primarily cater to the needs of the Vietnamese community in the Czech Republic. 

Popular Vietnamese exports, such as dragon fruit, lychee, longan, rice-based products (e.g., pho noodles, vermicelli, rice paper), and sauces, remain relatively unfamiliar to local Czech consumers. 

Successfully developing the market to target local consumers would significantly increase demand and create new opportunities for Vietnamese exports. 

Domestic producers and exporters should place greater emphasis on marketing efforts to create market demand. By doing so, the sale of products will develop more sustainably and steadily over time. 

Another significant challenge lies in the EU's complex and frequently changing import management policies. Since the EVFTA came into effect, the EU has introduced numerous new regulations, including stricter limits on prohibited substance residues and increased inspections of agricultural, forestry, seafood, and processed food products. 

Despite the elimination of import tariffs on many Vietnamese goods under the EVFTA, the increase in export volume has been modest. This is primarily because many exporters have yet to meet the EU's technical standards and requirements for cultivation, farming, and processing. Products such as fresh fruits, rice, animal-based food items, and instant noodles are examples of categories struggling to align with these regulations. 

To mitigate the adverse effects of these policies, producers and exporters must improve their capabilities and ensure their goods meet EU standards. Concurrently, relevant authorities should engage in negotiations with EU partners to remove barriers and facilitate increased exports. 

Moreover, businesses should promptly and comprehensively report any difficulties or obstacles in exporting to the Czech Republic or the EU to the appropriate authorities, either directly or through industry associations. This allows timely interventions and support from relevant organizations to address these challenges effectively. 

Table 1: Import-Export Turnover and Trade Surplus between Vietnam and the Czech Republic from 2018 to 2023 

(Unit: Million USD) 

Source: Calculated from data by the Vietnam General Department of Customs 

Table 2: Import-Export Turnover and Trade Surplus between Vietnam and the Czech Republic in the First Nine Months of 2024 

Unit: Million USD 

 

Source: Calculated from data by the Vietnam General Department of Customs 

According to statistics from the Vietnam General Department of Customs, in 2023, the trade turnover between Vietnam and the Czech Republic reached USD 1.135 billion, an increase of USD 305 million (equivalent to 36.7%) compared to USD 830 million in 2022. Exports amounted to approximately USD 958 million, while imports totaled USD 177 million, maintaining a high trade surplus of USD 781 million, up from USD 508 million in 2022, equivalent to a 53.7% increase. 

In the first nine months of 2024, trade turnover between Vietnam and the Czech Republic reached USD 1.498 billion, surpassing the total for 2023, with a surplus of USD 1.170 billion. Exports amounted to approximately USD 1.334 billion, while imports stood at USD 164 million, continuing to maintain a high trade surplus of USD 1.170 billion. 

Czech Republic's Exports to Vietnam 

According to data from the Vietnam General Department of Customs, Vietnam's imports from the Czech Republic increased significantly in the first nine months of 2024, reaching USD 164.2 million, a rise of 31.02% compared to the same period last year. Specifically, in September 2024, export turnover reached over USD 18.2 million, a decrease of 2.17% compared to August 2024 but an increase of 56.32% compared to September 2023. 

Table 3: Export Turnover of Key Goods from the Czech Republic to Vietnam in September 2024 and the First Nine Months of 2024 

Unit: Thousand USD 

 

T.Huong

Source: Vitic