EVFTA facilitates Vietnam’s agricultural product exports to EU market. Photo is Vietnamese agricultural exports to EU meet strict barriers. (Source: Hanoimoi)

After meeting the EU’s strict standards, Vietnamese agricultural products will have to improve to make a breakthrough and gain a firm foothold in this market.

According to Vietnamese Trade Counselor in Belgium and the EU Tran Ngoc Quan, the EU imports between 1.7 million and 2 million tonnes of rice a year on average, adding that certain quotas will be allocated by the bloc to countries. For example, India is leading the group of nations exporting rice to this market with 496,000 tonnes. It is followed by Pakistan and Thailand with 315,000 tonnes and 195,000 tonnes, respectively.

The competition in the EU rice market is fierce because of the quota and tariff issues. To export rice to Europe, rice-producing countries have to meet many standards, including those relating to pesticide residues. The EU side regularly conducts inspections in this regard even after the products are put for sale.

For Vietnam, rice is among the commodities that enjoy a 0% tariff according to the tariff quotas specified in the EVFTA. Vietnam shipped 97,000 tonnes of rice to the bloc last year, up 65% compared to 2021.

Quan noted that for agricultural products, the tariffs of many items were reduced to 0% immediately when the trade pact took effect or will gradually decrease to the point over a period of 3-5 years, adding this is a significant advantage for Vietnam's farm produce to enter the EU.

The official said two-way trade between the two sides has also grown, signaling a positive development. Exports from the EU to Vietnam increased by 20-25% in 2021-2022. European goods are of high quality and sustainable. For Vietnam to accede to this market, the process will help enhance the value standards of Vietnamese products.

Quan cited wood as an example. Vietnam imports wood from the EU and exports wooden furniture to the bloc. The EU's wood has been produced and exported in line with sustainable standards, so there is no need to explain about the origin of products made from this type of wood, he said, adding that this is a mutually beneficial process.

Despite the advantages that the EVFTA brings to Vietnam's exports to Europe, the official also mentioned the difficulties that local firms have to deal with. Specifically, the EU is making stricter requirements on quality, sustainability, the environment, product’s life cycle and food safety regulations, aiming to create better values for the environment and society.

He recommended that it is necessary for Vietnam to shift from producing a large quantity for a reasonable cost to focusing on sustainable products with added value to better meet the EU's standards.

For her part, Do Viet Ha from the Trade Office of the Vietnamese Embassy in Germany, said that since the EVFTA took effect, most commitments in the agreement have been implemented and left positive impacts on business activities, especially trade.

She cited statistics from the General Department of Vietnam Customs which showed Vietnam’s total export turnover to 27 member countries of the EU in the 2020-2022 period recorded good growth.

Specifically, in 2022, the total value of Vietnam’s exports to the EU reached 46.83 billion USD, marking a year-on-year increase of 16.7%, and accounting for 12.6% of Vietnam's total export turnover.

The EU is Vietnam's third-largest trading partner and an import market for agricultural products with strong growth after the EVFTA came into effect.

Many of Vietnam's leading rice exporters have accessed the EU market in the past year, including Dai Duong Xanh Import-Export Ltd. Co., Loc Troi Group, Thinh Rice Trade in Services Joint Stock Company, Dong Xanh Food and Processing Joint Stock Company, and Thanh Phat Co. Ltd.

Besides the advantages, when entering the EU market, Vietnamese goods still face difficulties, particularly in meeting the rules of origin to enjoy preferential tariffs, and the risk of increasing trade remedies, Ha said.

To overcome these difficulties and maximise benefits from the EVFTA, the official said that businesses need to proactively study the guidelines of the agreement, the standards of goods exported to the EU market, as well as the EU market, people's tastes and consumption need, with a view to suitably improving product quality and design.

According to Ha, the government needs to develop an overall strategy to provide orientations and roadmaps for ministries, sectors, and localities to fully and promptly implement the commitments of the EVFTA. It also needs to develop mechanisms to facilitate the development of domestic enterprises, and prepare solutions to support industries under great competitive pressure when implementing the agreement.

More policies are also needed to attract foreign investment from the EU to Vietnam, she said.