Vietnam - EU Free Trade Agreement: Impressive growth numbers

The textile and garment industry promptly seizes opportunities from EVFTA. Photo: Quang Vinh.

Many industries reap "sweet fruits"

Officially effective from August 1, 2020, up to this point, EVFTA has been implemented for more than 2 years. Despite being significantly affected by the Covid-19 pandemic, the business communities of both Vietnam and the 27 EU member states have effectively exploited the incentives brought by the agreement. Making good use of the EVFTA, the seafood industry has been recording positive export figures in the past 2 years, despite the raging Covid-19 epidemic. According to Mr. Truong Dinh Hoe - General Secretary of the Vietnam Association of Seafood Exporters and Producers (Vasep), although there are no exact statistics on the export turnover of Vietnam's seafood products to the EU market after 2 years. In the year of implementing EVFTA, the seafood industry is still completely confident in the ability to export to the EU market, because the activities of seafood enterprises really benefit from this important agreement. For example, with shrimp, statistics show that exports to the EU in 9 months increased by 40% to over 570 million USD. Notably, in the EU, the top 3 markets including the Netherlands, Germany and Belgium all increased 58-91% of Vietnam's shrimp imports from the beginning of 2022 until now.

With the textile and garment industry, the "sweet fruit" of the EVFTA comes to garment enterprises, although not as good as other export industries, but there are also many bright spots. If in the first year that the EVFTA comes into effect, under the significant impact of the Covid-19 pandemic, many key export products of Vietnam to the EU will decrease, including textiles (down 15.2%) compared to 2020), in the second year of implementation of this Agreement, exports of textiles and garments to the EU increased by 16.7% over the same period last year, and the rate of using preferential certificates of origin under the Agreement EVFTA also increased much higher than the first year of implementation (the first year of EVFTA implementation, textiles and garments using C/O form EUR.1 reached 15.17%).

According to the Vietnam Textile and Apparel Association, textile and garment exports to the European Union in the first eight months of this year increased by about 40% over the same period last year. The EVFTA Agreement has had positive effects, creating an open and comprehensive market, and at the same time promoting the textile and garment industry to make efforts to invest in technological innovation, promote automation, digital governance, etc. meet the very strict "two-stage" rules of origin of the Agreement.

General Director of Garment 10 Corporation Than Duc Viet also emphasized on the benefits that textile enterprises receive from the EVFTA. “The EVFTA has been in effect for two years and has a very positive impact on enterprises with export products such as Garment 10. The agreement opens a great opportunity for Garment 10 to increase market shares and new customers” - Mr. Viet said.

With the agricultural export industry, the picture of EVFTA implementation is also bold and bright. Many agricultural export enterprises said that EU countries have greatly increased the amount of goods purchased from Vietnam, which has helped the popularity of Vietnamese enterprises' goods in the EU increase, consumers increasingly prefer products. Vietnamese. According to statistics of the Ministry of Industry and Trade, about 90% of agricultural products such as coffee and pepper of the company are exported through trading partners such as the Netherlands, Switzerland, Denmark, Germany, etc. increasing amount.

Continue to take advantage of the opportunity

Commenting on the export of goods from the EVFTA, Ms. Nguyen Cam Trang - Deputy Director of the Import and Export Department (Ministry of Industry and Trade) emphasized that the EVFTA has contributed to promoting Vietnam's exports to partner markets. In the two years of implementing the Agreement, many of Vietnam's exports have recorded impressive growth numbers to the EU market. Shown in the total export turnover from Vietnam to the EU in the period from August 2020 to July 2022, reaching 83.4 billion USD, an average increase of 41.7 billion USD/year, 24% higher than export turnover. average for the period 2016-2019. The proportion of exports taking advantage of EVFTA tariff incentives has increased to 20.2% in 2021 and 24.5% in the first 6 months of 2022. “In particular, the EVFTA has had a spillover effect on many residential areas. when the products that make the best use of the EVFTA tariff preferences are recorded as rice, footwear, seafood, plastic and plastic products ...", Ms. Trang said.

Most recently, updating survey data in two years of implementing the EVFTA, Ms. Nguyen Thi Thu Trang - Director of the Center for WTO and Integration - VCCI expressed quite optimistic when stating: The percentage of Vietnamese enterprises that have been The benefits from EVFTA are very positive, with nearly 41% of businesses saying they have enjoyed at least some benefit from EVFTA. "The most common benefit is from preferential tariffs for import-export goods and positive effects in increasing orders, revenue, and profit," said Ms. Thu Trang.

The Director of the Center for WTO and Integration also pointed out some limitations. In order to continue building the market development plan of enterprises for each product entering the EU market, Ms. Nguyen Cam Trang said that the initiative in awareness and actions of enterprises is a necessary condition and efforts to improve. Competitiveness is a sufficient condition for enterprises to realize benefits from EVFTA or FTAs ​​in general.

 “Brand positioning and trade promotion are what businesses need to pay attention to at this time. Enterprises need to actively grasp information about opportunities to cut tariffs for each specific product of their business. Enterprises proactively capture information about the EU market with trends, tastes as well as the mechanism of importing goods, in which attention is paid to quality requirements to avoid goods being returned because they do not meet standards. ...", Ms. Thu Trang stated.

Although the results achieved from the EVFTA in the past two years are quite impressive, but according to many businesses, the implementation of the EVFTA also has some shortcomings and limitations ... causing barriers to enterprises. can realize the expected benefits from the Agreement. Especially in the context that many types of goods exported from Vietnam to the EU are still highly dependent on imported raw materials, there is still a potential risk of disruption in the supply chain of goods after the pandemic.

While the EU is a market that always has high requirements on quality standards, as well as many strict barriers to trade, focusing on green, clean consumption trends, food hygiene and safety, labor standards, etc. activities, environment, and traceability regulations… limit the accessibility of many industries and businesses in Vietnam.

Experts also said that in order to implement the EVFTA more effectively in the near future, along with the efforts of enterprises themselves, it is necessary to accompany the management with supportive policies and create favorable conditions for the EVFTA. Enterprises seize opportunities from EVFTA.

Duy Khang