Domestic firms should make the most of preferences brought back by the EU-Vietnam Free Trade Agreement (EVFTA) to increase exports to the EU market amid the global economy negatively impacted by the COVID-19 pandemic.

Rice is one of the export items that enjoy tax incentives under the EVFTA

Experts made recommendations at a seminar jointly held in Ho Chi Minh City on October 2 by the Vietnam Chamber of Commerce and Industry (VCCI) and Germany’s Friedrich Naumann Foundation for Freedom (FNF Vietnam).

The Ministry of Industry and Trade’s statistics indicate that since the enforcement of the EVFTA in August, a total of 7,200 sets of certificates of origin (C/O) have been issued to businesses that export items to the EU.

In line with these figures, 7,200 shipments have enjoyed tax incentives in line with the trade deal, accounting for 7.3% of the country's total exports to the demanding market throughout August.

Some of the notable export items to enjoy these preferential tariffs include footwear, seafood, plastics, coffee, textiles, bags, and vegetables. Agro-forestry-fisheries exports to the EU in August increased by over 17% compared to July.

Most notably, rice exports witnessed impressive growth in terms of both volume and value, with the export price experiencing a rise of between US$80 and US$200 per tonne. 

Pham Hung Tien, deputy director and Project Manager of FNF Vietnam, pointed out that the EU represents the world’s second largest import market and it has been a key export market for Vietnam for the past years.

The export value of Vietnamese goods accounts for only 1.8% of the EU’s total annual import demand, presenting a window of opportunity for key Vietnamese export items, including garments, footwear, agro-forestry-fisheries, and plastics, to penetrate the demanding market.

Tien therefore advised local businesses to study the trade pact’s commitments in an effort to effectively optimise the EVFTA’s incentives.

Moreover, he added that aside from the rules of origin, local firms must meet technical standards in terms of food safety, labeling, and the environment set by the EU, this can be considered a necessity in order to fully tap into the market.

At the seminar, experts recommended that management agencies speed up the promulgation of guidelines regarding the trade pact, while also strengthening connectivity between the State and enterprises to promptly update and remove hurdles during the process of implementing the EVFTA.