Talking with us by phone on February 8 when we were present at Fruit Logistica 2020 – the world's largest fresh fruit and flower fair and fair held in Berlin (Germany), Mr. Dang Phuc Nguyen , General Secretary of Vietnam Fruit and Vegetable Association, said the Vietnamese booths have welcomed many European customers. These are all customers who are planning to import fruits, vegetables … of Vietnam.
Big land for all
“The second time at the world's largest fair for fruits and vegetables, meeting with partners from Germany and Europe, is an important opportunity to promote products to the world” – Mr. Nguyen said and informed. News orders received from this year's fair has more than doubled compared to the previous year although Vietnam booth is located in a relatively modest position due to not much investment costs.
According to Mr. Dang Phuc Nguyen, the fair is also of great significance in promoting the export of Vietnam's fruits and vegetables to the EU in the context of the Vietnam – EU Free Trade Agreement (EVFTA). will take effect in the near future. “The tax rate to 0% is an opportunity for Vietnam to open a big door into the EU market, especially enterprises (enterprises) exporting dragon fruit, mango, rambutan, grapefruit, leafy vegetables … Exporting about US $ 100 million to the EU today, EVFTA offers the opportunity to grow to US $ 200 million or more ”- Mr. Nguyen predicted.
For Duc, Mr. Dang Phuc Nguyen assessed that this is a big market with many important partners. In particular, Germany is one of the gateways to Europe with high income levels, so the ability to buy high quality fruits and vegetables is great. Currently, the leading German supermarket chains such as Netto, Edeka, Selgros have successfully imported and distributed Vietnamese fruit products, especially dragon fruits.
The EU is also the largest customer of Vietnamese shrimp exporters, so this industry expects EVFTA to make a significant “jump”. Mr. Truong Dinh Hoe, General Secretary of Vietnam Association of Seafood Exporters and Producers, said that when the import tax of raw shrimp (fresh, frozen, chilled) to the EU decreased from 12% -20% to 0% now. When the agreement comes into effect, shrimp exports to this market may increase by 20% if the quality requirements are met.
Mr. Nguyen Van Tri, General Director of Lap Phuc Co., Ltd, commented: “EVFTA is a great opportunity for mechanical engineering enterprises, because advanced countries are increasingly narrowing their manufacturing plants in this field. Lap Phuc's main market is the US, there are no customers in the EU. When EVFTA takes effect, if the plant expands and increases capacity, the company will look for opportunities to do business with the EU market ”.
Booth of Vietnamese businesses at Fruit Logistica 2020 Photo: Nguyen Phuc
State support, businesses do not do well lose!
Talking about the opportunity from EVFTA, Mr. Dang Phuc Nguyen concluded: “The removal of tariff barriers, facilitating export and state enterprises has been completed. Now the part of farmers, businesses have to do, it is to promote planting and packaging of quality products, especially in terms of residues of plant protection products in the product. To do so, to increase the rate of planting according to GlobalGAP standards, this rate is still small, only 5% -10% of the total output. The State supports but farmers, businesses do not do it, they also lose “.
Mr. Diep Thanh Kiet, Vice President of Vietnam Leather and Footwear Association (Lefaso), also stated the important point of view in this context is how to allow Vietnamese enterprises to exploit and take advantage of opportunities from EVFTA?
Mr. Kiet analyzed that although exports to the EU have declined over the years, the export of footwear and bags to the EU has grown well and currently accounts for about one third of the total turnover of the industry. When EVFTA is available, export opportunities increase but enterprises must be familiar with the requirements of raw materials and designs of this market, so it is unlikely that businesses producing goods to the US and Japan … will focus on exporting. EU. Therefore, the greatest opportunity belongs to businesses exporting to the EU that may increase opportunities to boost exports to this region.
Lefaso leader noted that while waiting for EVFTA to be approved, Vietnamese enterprises need to pay attention to some competitors that export goods to the EU such as Bangladesh. This is a market enjoying preferential treatment from the EU's Generalized Preferential Tariff (GSP) with all products having zero tax; In addition, labor costs are much lower than Vietnam …
“Vietnamese enterprises should not be subjective and should pay attention to compete with markets because foreign investors are moving to Bangladesh to take advantage of opportunities. More importantly, the state and businesses need to pay attention to the problem of raising the localization rate in order to both enjoy incentives from EVFTA while avoiding dependence on raw materials from other countries and sustainable development ”- Mr. Diep Thanh Kiet recommendation.
Vice President Lefaso still appreciated EVFTA despite the UK leaving the EU because 27 member countries were already a big market for Vietnam. On the other hand, in the context of the impact from the US-China trade war, Vietnam has a spike in export turnover to the US and is on the list of countries subject to monetary supervision, EVFTA is an opportunity to Enterprises boost export.
The highest level of commitment
Minister of Industry and Trade Tran Tuan Anh assessed that the level of commitment in EVFTA can be considered as the highest level of commitment that Vietnam has achieved in the trade agreements (FTAs) that have been signed so far. This makes sense when currently, just over 42% of Vietnam's exports to the EU enjoy the GSP tax rate of 0%.
“Along with the opportunity, the implementation of new generation FTAs poses many challenges for businesses and the economy, such as competition pressure, protectionist production trends of importing countries, regulations on protection. trade … To take advantage of opportunities, businesses must change business thinking, flexible access to the market. Only when they meet the conditions and standards of the import market will the preferential tariffs be effective “- Minister Tran Tuan Anh said.
P.ung
European businesses also benefit
Vietnam committed to eliminate import duties on 48.5% of tariff lines, equivalent to 64.5% of EU exports to Vietnam as soon as the agreement came into effect. Then, after 7 years, 91.8% of import tariff lines, equivalent to 97.1% of exports from the EU, were removed by Vietnam. After 10 years, the elimination of these tariff lines increased to 98.3%, equivalent to 99.8% of EU exports. About 1.7% of the remaining EU tariff lines are applied by Vietnam to eliminate longer than 10 years or follow WTO commitments.
Specifically, in the group of cars, auto parts, motorbikes, the agreement applies to bring the tax rate to 0% after 9 years for high-displacement cars, 10 years for other cars, 7 years for auto parts, 10 years for normal motorcycles and 7 years for motorcycles of over 150 cm3. In the group of wine, spirits and beer products, the agreement stipulates an import tax of 0% after 7 years for wine and spirits and after 10 years for beer. In addition, the import tax is 0% after 7 years for 3 frozen pork lines and 9 years for other types of pork; eliminate tax on a 10-year roadmap with EU imported chicken.
Regarding investment, the European Business Association in Vietnam (Eurocham) stated that EVFTA will support Vietnam to become an even more attractive investment environment for European businesses in Southeast Asia. In the long term, this agreement will contribute to increasing trade and investment on the basis of mutual benefits, improving environmental and social standards, and thereby helping Vietnam adapt to the growth rate. fast growth and more sustainable sources of investment in Vietnam. “The EU is an important source of foreign investment (FDI) for Vietnam with a total accumulated capital of US $ 19.2 billion in 2017. After approval, EVFTA will promote trade and investment between the two sides. EVFTA will activate Vietnam's growth and development, improve the legal framework, enhance the trade and investment environment, minimize trade barriers, improve safety and quality standards, and promote exported to European countries ”- Eurocham assessed.
