EU deal benefits Vietnamese exports
Tran Thanh Hai, Deputy Director of the Agency of Foreign Trade under the Ministry of Industry and Trade
Which sectors have taken advantage of tariff cuts under the EVFTA during the last two years?
Overall, most export sectors have made rather good use of tariff cuts under the trade deal. From August 1, 2020 to June 30, 2022, according to data from the General Department of Vietnam Customs, Vietnam’s export value to the EU reached US$79.6 billion, a year-on-year increase of 14.3 percent.
The export value averaged about US$3.5 billion per month. The export of most key products remained on the rise. Topping the export growth list were iron and steel (up 255.5 percent); cameras, film cameras and components (up 138 percent); base metal (up 77.3 percent); coffee (up 75.2 percent); pepper (up 55.8 percent); fibers and yarns (55.3 percent).
In the first two quarters of 2022, EUR.1 certificates of origin were used for export of products such as rice, footwear, electrical wires and cables, fibers and yarns, confectionery and cereal products, and seafood.
How did Vietnamese companies meet the EU’s very strict requirements for imported goods during the last two years?
Vietnamese companies have adapted themselves to commitments in the EVFTA and become flexible in using certificates of origin to benefit from the trade deal.
They are enhancing their competitiveness by creating high-quality products meeting strict requirements of the EU market, especially for farm produce and seafood.
In the first two quarters of 2022, Vietnam exported US$652 million worth of seafood to the EU, up 42.1 percent year on year; fruit and vegetable exports reached US$82 million, up 12.2 percent; rice exports reached US$9 million, up 5.4 percent. EUR.1 certificates of origin were used for 80.9 percent of seafood exports; 67.6 percent of fruit and vegetable exports; and 100 percent of rice exports.
What challenges face Vietnamese exports to EU member countries?
Meeting the EU’s rules of origin and strict technical standards is a great challenge for businesses seeking access to this discerning market.
The EVFTA has new, different rules of origin compared with other free trade agreements (FTAs) that involve Vietnam. Therefore, it’s difficult for Vietnamese companies, especially those still inexperienced in exporting to the EU, to understand the rules.
Coffee, leather and footwear exports to the EU have grown strongly
For example, flexible quotas for textiles and garments are annotated at Product Specific Rules (PSR) that appear at the bottom of the agreement page, and these quotas are applied to only product lines mentioned in the annotation but not all textile and garment products and materials as other FTAs.
Therefore, Vietnamese companies should thoroughly understand the EVFTA’s rules of origin. To do this, they should send their technical staff to training courses on the trade deal’s rules of origin and other requirements organized by the Ministry of Industry and Trade.
For its part, the ministry will continue disseminating information about free trade agreements, especially new-generation ones and those in the initial period of implementation, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the EVFTA, the UK-Vietnam Free Trade Agreement, and the Regional Comprehensive Economic Partnership. The ministry will also coordinate with relevant units to organize workshops, seminars and specialized training courses on market opening opportunities and rules of origin in FTAs.
Further, the ministry will continue facilitating administrative procedures related to imports and exports, especially the granting of certificates of origin under FTAs.
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