Fisheries, textiles, footwear, wood, rice … are the items that benefit from 1/8, when EVFTA comes into practice. This is also a great opportunity for Vietnamese businesses in the difficult context due to the complicated COVID-19 pandemic.
From today (August 1), EU-Vietnam Free Trade Agreement (EU) – Vietnam (EVFTA) officially came into effect after 10 years of negotiation. Accordingly, the EU will eliminate import duties on about 85.6% of tariff lines, equivalent to 70.3% of Vietnam’s exports to the EU.
After 7 years from the date of entry into force of the Agreement, the EU will eliminate import duties on 99.2% of tariff lines, equivalent to 99.7% of Vietnam’s exports. For the remaining 0.3% of exports, the EU commits to giving Vietnam a tariff quota with an import duty of 0%.
Thus, it can be said that nearly 100% of Vietnam’s exports to the EU will be eliminated import tax after a short journey.
To date, this is the highest level of commitment a partner has given to us in signed FTAs. This benefit is especially meaningful when the EU is continuously one of the two largest export markets of our country today.
Fisheries, textiles, footwear, wood, rice … are the items that benefit from 1/8, when EVFTA comes into practice.
Vietnam has advantages in producing and exporting agricultural and forestry products, while the EU has a large demand for these items with the import value accounting for 8.4% of the total annual import value. Therefore, the room for export growth to the EU is still very large.
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood export from Vietnam to the EU is facing a huge opportunity when businesses can access a huge seafood consumption market with The average consumption reached 22.03 kg / person, 5.34 kg higher than the world average.
Along with that, EVFTA will be the most impactful agreement, creating a major turning point in the market structure for Vietnam’s shrimp products. Specifically, nearly 50% of tariff lines are currently having a base rate of 0-22%, of which the high tax rates are from 6-22%, will be reduced to 0%. About 50% of the remaining tax lines have a base tax rate of 5.5-26% will be 0% after 3 – 7 years.
With wood industry, the EU is currently the second largest import market for wooden furniture in the world, although Vietnam is one of the five largest wood processing and exporting countries in the world, the export turnover to the EU is still modest. only accounts for more than 1% of the total annual furniture import demand of this market.
However, when EVFTA comes into effect, EU importers may prefer to buy Vietnamese wood products to get tax reductions, then, the price of Vietnamese wood products in the EU will decrease and attract consumers. more European.
According to the commitment of EVFTA, among the key export items of Vietnam to the EU, textiles and garments will be eliminated by the EU with 77.3% of export turnover in 5 years, 22.7% of turnover. The remaining EU will also eliminate tariffs after 7 years.
In addition to enjoying the advantage of tax rates, this Agreement also promises to bring Vietnamese textile enterprises the opportunity to import high quality machinery, access to standard raw materials in the EU …
With the leather and footwear industry, the ability to develop and expand the market of the Vietnamese leather and footwear industry will be much bigger thanks to the positive effects of EVFTA. The EU is currently the second largest export market for Vietnam’s footwear with about 30% of the total export value.
In particular, Germany, France, and Belgium are the main markets. When EVFTA takes effect, Vietnam will have more opportunities to expand exports, and at the same time, create momentum to attract investment in supporting industries.
With regard to rice export, the Ministry of Industry and Trade’s Import and Export Department said that rice exports to the EU in 2019 reached US $ 10.9 million, up 92.4% compared to 2018.
Regarding market capacity, the trend of using rice in the EU is increasing sharply due to the popularity of Asian food here. According to statistics, each year the EU consumes about 2.5 million tons of rice. Therefore, coming here, the opportunity for Vietnam’s rice exports to the EU is huge.
Data from the Ministry of Industry and Trade shows that the EU is currently Vietnam’s leading important trading partner, the second largest export market (after the US) with two-way turnover increasing nearly 14 times from only 4, 1 billion USD in 2000 to 56.45 billion USD in 2019; in which Vietnam’s exports to the EU increased nearly 15 times from USD 2.8 billion to USD 41.54 billion.
Vietnam is also the second largest trading partner of EU (after Singapore) in ASEAN; It is also the first developing country in Asia to sign a free trade agreement with the EU.
In the opposite direction, for EU exports, Vietnam committed to eliminate tariffs as soon as the Agreement comes into effect with 48.5% of tariff lines (accounting for 64.5% of import turnover). Then, after 7 years, 91.8% of tariff lines equivalent to 97.1% of EU exports were removed from Vietnam by import taxes.
In the next 10 years, the elimination of tariffs was about 98.3% of the tariff lines (accounting for 99.8% of import turnover). For the remaining 1.7% of the EU’s tariff lines, Vietnam will apply a roadmap to abolish import duties longer than 10 years or apply tariff quotas in accordance with WTO commitments.
According to VietnamBiz
