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Export crops threshold Vietnam-EU FTA: There are many barriers!

( Update: 27/11/2018 )

When the Free Trade Agreement (FTA) between Vietnam and the EU was signed, agriculture will be one of the items are expected to benefit the most. However, according to many experts, to penetrate deeper into this market, there are many hurdles to overcome.

Export crops threshold Vietnam-EU FTA: There are many barriers!

To penetrate deeper into the EU market, Vietnamese agriculture still many barriers to overcome. Source: internet

Great potential, but is also difficult markets

At the seminar "The EU market opportunities and new challenges, demands from some typical market" by the Department of Trade Promotion (Ministry of Commerce) held on 24/9, Director of Trade Policy European Chamber of Commerce in Vietnam (EuroCham) Maylis Labayle said separately in 2013, Vietnam has exported to EU Euro 21.3 billion and imports from the EU is only 5.3 billion Euro.

So here's to the advantage of export opportunities towards the FTA between Vietnam - EU was signed. FTA between Vietnam and the EU may be signed will total domestic product (GDP) of Vietnam increased from 10% - 15% compared to today. In addition, the FTA will help Vietnam's exports to the EU increased from 30% - 40% and imports from the EU in Vietnam increased from 20% - 25%.

  According to the Department of Trade Promotion, Ministry of Industry and Trade, the EU remains an important export market for leading businesses and customers in Vietnam through increased agricultural exports some traditional strengths, such as : coffee, cocoa, pepper, cashew, shrimp ...

In particular, Vietnam accounted for nearly 2/3 of import and export values - ie acting surplus in bilateral trade relations. EU as well as potential areas of traditional and very prominent, with purchasing power is abundant and stable income by the average topped the world.

TS. Nguyen Manh Dung, Department of Agro-forestry and fisheries and Salt, Ministry of Agriculture and Rural Development (MARD), said the opportunity to export agricultural products to the EU is very large due to the current European crowded Vietnamese living, especially in small countries, and demand for agricultural products in the European Vietnam is growing.

Over the years, the small market in Europe, such as Slovakia, Portugal, Hungary, Latvia, Slovenhia ... is where the import of agricultural products in Vietnam increased the most, with annual increases of 57 % -200%.

However, generally, the EU market is still really "difficult" for Vietnamese agricultural products. A business representative at the conference "EU market opportunities and new challenges, demands from some typical market" has had to say, "to the product packaging for export is also very complex causes many businesses discouraged ".

Moreover, if it meets all the criteria of the EU launched the production cost will be very high and less competitive than the same products from other markets, especially China.

Export of raw agricultural products are still popular

In fact today, many agricultural products of Vietnam exported to the EU are diminishing in number, price and market share. According to the Department of Trade Promotion, Ministry of Industry and Trade, as typical for tea products, in 2007, the proportion of Vietnam's tea exports to the EU is 20%, but come May 8/2014, only about 7%.

The cause of the "plunge" is due Vietnamese tea in the EU market without identifying the source of origin, high chemical residue, Vietnamese tea brand in this market are too faint, no certification social responsibility in production.

Moreover, many agricultural exporters still stumped need to expand markets and increase agricultural exports to the EU. For example, coffee processing enterprises still accept the sale of new products through semi-processed or finished products; while fruit and vegetable processing plants not mastered the material next to the passive technology, lack of capital, preservation methods obsolete or disadvantages of hauling distance away ...

Status now accepting new goods through pre-processing is still quite popular due to lack of supply of raw material to ensure both quantity and quality. That reduces the chance of increasing the added value of agricultural products for export as well as lost opportunities for employment and income for workers.

The challenge before the "threshold" FTA

Speaking at the conference, according to her Maylis Labayle, Head of Advocacy, the European Chamber of Commerce in Vietnam (Eurocham), if free trade agreement (FTA) Vietnam - EU was signed, it will help Vietnam's exports to the EU increased by 30% to 40%.

However, according to Nguyen Manh Dung, Department of Agro-forestry and fisheries and Salt (Ministry of Agriculture and Rural Development) said that, to date, the enterprise of our country is not really the standard be good to receive the FTA with the EU's preference.

When signing the FTA, the business will have many tax advantages. The tropical agricultural products that Vietnam can export strengths, such as rice, fresh vegetables, honey, medicinal plants, jelly, seafood, rice ... will have great opportunities in the EU. If businesses are not ready to meet the standards of product quality, the requirements of accountability to consumers, society as required by the EU, it will be hard to break out of the export.

For example, with wood products, beginning in 2015 Vietnam will sign a Voluntary Partnership Agreement with the EU on forest law enforcement, governance and trade of forest products forest but businesses are not eligible to meet the transparent timber origin. Or with tea and many other agricultural products are still facing residues of plant protection substances is quite high. Business to no production structure suitable products for export. Business and unhealthy competition between the processing units of agricultural export prices made a down day, the lesson is typical for tea, pig, fish ...

To boost exports and welcome the opportunity to sign FTA with the EU, the experts at the workshop "The EU market opportunities and new challenges, demands from some typical market" for that enterprise Vietnamese agricultural exports to "do business again." Specifically: (i) Enterprises to build brand products to enhance competitiveness; (ii) Right to ascertain the EU, because in addition to product quality standards, now have the responsibility to society, with consumers ... This is the problem that most of us think little business to .

At the agency level, the current Minister of Agriculture and Rural Development has made support for exporters of agricultural products, such as: improving the quality of agricultural produce goods to the value of the block exports accordingly. Besides, helping businesses innovate processing technology, incentives to attract foreign investment in agro-processing to improve the quality of products eligible for export to the EU.