In early August 2020, Vietnam – EU Free Trade Agreement (EVFTA) will take effect. The preparation time will not be long if Vietnam does not promptly remove obstacles.
Both the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Industry and Trade agreed to maintain an open dialogue mechanism with the business community and take the initiative in implementing EVFTA.
Passive businesses
Mr. Dang Hoang Giang – General Secretary of Vietnam Cashew Association (Vinacas) said that businesses in the EU have been grasping EVFTA information for a long time. They also went to Vietnam to enter into joint ventures, associate to open processing plants to compete directly with domestic enterprises in the domestic market.
A cashew processing enterprise in Binh Phuoc. Photo: IT
“It is important that the central ministry, the business community and the people alike unanimously identify opportunities and challenges. Only when we have the same faith and overcoming difficulties will we come to victory. ”
Minister of Agriculture and Rural Development Nguyen Xuan Cuong
However, not many domestic enterprises actively open establishments or joint ventures with EU partners to bring goods here.
In addition, most of the industry’s exports are semi-processed. The technical barriers to EU processed goods remain relatively open. “However, when confronting opponents directly within EVFTA framework, the technical barriers will be higher” – Mr. Giang said.
Contrary to other agricultural products, cashew industry has good processing capacity but domestic raw materials are still not autonomous. Processing capacity of the whole industry is 2 million tons, while domestic production only meets 300,000-400,000 tons. Another difficulty is that cashew trees are in fierce competition with other major crops. The solution to increase the area in a short time is quite difficult.
Although the cashew industry has actively expanded production areas in Cambodia, the radical solution is still the initiative of domestic raw materials. “Vinacas is ready to accompany and urgently needs agriculture to have solutions and plans to improve productivity and quality of cashew nuts” – Mr. Giang said.
According to European experts, the benefits of EVFTA for Vietnam’s agriculture, forestry and fishery sectors are numerous, but also pose a great challenge for businesses. It is important to meet high standards and requirements as technical barriers increase. Consumers also require strict rules of origin, food safety and hygiene …
In addition, some agricultural products of Vietnam are not really competitive with products of other countries in the region. The main reason is that the processing and diversifying of products are still limited, reducing the added value of the products. Most of the goods have to be exported in the form of semi-processed products, packed in large, unbranded packages, so the prices are very low, resulting in a lot of losses from producers and traders.
Troubleshooting for businesses
At a recent conference in the Mekong Delta Rice Institute, the Ministry of Agriculture and Rural Development organized a consultation to formulate a decree on certifying rice varieties for export to the EU. However, Mr. Pham Thai Binh – General Director of Trung An Joint Stock Company admitted, until now it is unclear the procedures to join EVFTA.
Knowing the value will be great when exporting rice to the EU but what businesses need now is a specific process for legal procedures. By August 1, EVFTA will take effect but many businesses are confused to have a complete and valid dossier for lots of rice exported to the EU.
“Not smart, businesses can not export all 80,000 tons of rice that the EU has granted quotas to Vietnam in 2020” – Mr. Binh worried.
Mr. Tran Tuan Anh, Minister of Industry and Trade, said the opening of rice is quite sensitive in EU trade policy. However, Vietnam and the EU have agreed on an important requirement that only the type and quality of rice that meet EU requirements will be licensed. And there must be confirmation from the state level, namely both the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development.
The two ministries agreed to develop a decree guiding registration and certification to avoid disputes with importers of the EU market as well as rice associations of countries. The Ministry of Industry and Trade hopes to complete it soon enough to timely implement it on August 1.
“If not, the Ministry will consult the EU to apply for a temporary mechanism, addressing the need to export the first batch of rice to the EU” – Mr. Tuan Anh said.
Minister of Agriculture and Rural Development Nguyen Xuan Cuong also said that the Ministry is ready to guide enterprises directly to ensure the implementation of EVFTA is timely and effective. With cashew industry, the Ministry is developing a project of high-yielding varieties and changing the whole cultivation process, ensuring stable raw materials for processing.
Sharing the concerns of the business community, Minister Cuong said that Vietnam’s ratification of EVFTA at this time was very timely, creating momentum for the post-Covid-19 economic recovery. The business community has made great efforts over the years and continues to play an important role in the near future.
However, the remaining time is very short. Both MARD and MOIT agreed to maintain an open dialogue mechanism with the business community and take the initiative in implementing EVFTA.
Yuan Wei
Source: Dan Viet Newspaper
