With the European Union –Vietnam Free Trade Agreement (EVFTA) taking effect in coming weeks, local businesses are advised to follow rules on origin traceability to seize upon the opportunities brought about by accessing the EU market, according to insiders.

The European Union –Vietnam Free Trade Agreement is anticipated to create a range
of export opportunities for agricultural products, especially Vietnamese fruits

At present, the EU makes up the fourth largest export market for Vietnamese fruit and vegetable products, following China, the United States, and Japan. Once the EVFTA takes effect slated for August 1, the exemption of import duties when goods enter the EU market will make a significant contribution to enhancing the competitiveness that Vietnamese fruits enjoy in comparison with items from other countries.

Despite these benefits, Vietnamese enterprises remain afraid of entering the EU market due to technical barriers and stringent regulations on products that use pesticide residue and other banned substances set by EU importers. 

Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetables Association, noted that firms must strictly obey the high standards set by the EU with regard to food safety. This includes the limited use of pesticide residue to avoid having items returned, therefore having a negative impact on the country’s fruit and vegetable industry.

Nguyen emphasised that origin traceability will be a mandatory requirement for fresh fruit and vegetable importers, adding that EU enterprises will require all fruit exporters to fully obey rules relating to origin traceability. 

Filip Graovac, Deputy Country Representative at the Asia Foundation, pointed out that Vietnamese firms have yet to apply the rules on origin traceability of goods in an effective manner, although they are making efforts to expand very well. 

He underscored the importance of new-generation FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP)  and the EVFTA, both of which present a wealth of opportunities for local firms to expand into new markets. This is particularly true in the current context of the country emerging as a safe destination after the novel coronavirus has been brought under control. 

Graovac noted that Vietnam has great potential for exporting high-quality agricultural products as well as having responsible producers, but the crux of the matter is that those advantages should be introduced to importers.

To equip domestic businesses with such knowledge, the Australian Government has funded a project aimed at boosting the traceability of goods and developing exports. The two-year project which began in 2020 is believed to benefit processors of coffee, peppers, mangoes, ceramics, and rattan products. 

The results of the project are set to be replicated to 13 key agricultural export items and many other products nationwide under the "One Product One Commune" scheme.

Nguyen Dinh Tung, General Director of Vina T&T Group, stated that alongside the support of the Government, there should be concerted efforts made by enterprises and co-operatives to comply with the transparency of information and origin traceability relating to products. 

He noted that along with the Hazard Analysis and Critical Control Points and the Global Partnership for Good Agricultural Practice standards, local firms have been advised to gain greater insights into new provisions under the EVFTA including those on social welfare for workers and environmental protection, in order to successfully penetrate the demanding EU market.