Free Trade Agreement of the European Union (EU) - Vietnam (EVFTA), effective from July 1, 2016, is expected by domestic enterprises (businesses) to increase goods and expand markets. export market to this market. However, for businesses to take advantage of this advantage requires a long-term investment strategy.
Thien Hung Technology Co., Ltd. (Thuan An Town) boldly invests in production technology to meet the requirements of EU partners. Photo: My Phan
Barriers from engineering
At the Vietnam-EU Trade Forum with the topic "EVFTA - new horizon of comprehensive cooperation" by the Ministry of Industry and Trade in coordination with the recently organized EU Delegation, Mr. Hoang Quoc Vuong, Vice Minister of Public Affairs In the past 18 years, the trade value of Vietnam - EU has increased more than 13 times, from about 4.1 billion USD in 2000 to 55.84 billion USD in 2018. EVFTA takes effect, commodities like textile Garment, footwear, mobile phones, computers, agricultural products ... of Vietnam will have many advantages because there are more than 75% of tax lines to 0%. Without EVFTA, the tax rate of Vietnamese goods exported to the EU is 5-22%.
In Binh Duong, the wood industry - the strength of the province, EU is the fourth largest export market. The EU is also the main market to supply wood for Vietnam. When EVFTA comes into effect, the domestic wood processing industry will enjoy 0% tax rate for at least 90 wood products exported from Vietnam.
According to Mr. Dien Quang Hiep, Chairman of Binh Duong Timber Association, in the immediate future, the most positive impact from EVFTA is that enterprises will be reduced prices of machinery and equipment imported from the EU industry. However, EU is a market that requires strict technical standards, origin criteria ... This is what businesses need to pay attention to meet the standards.
On the other hand, Ms. Trinh Thi Hong Chau, Director of Kim Chung Mechanical Company, said that for electrical products in the field of electrical engineering, it is necessary to ensure technical and public criteria to enter the European market. Technology is very strict from partners. Meanwhile, domestic enterprises are mostly small and medium, so it is difficult to equip with modern technology. Currently the company is promoting links, doing each stage. In the long run, the company also has to calculate to find the capital to invest in technology if it wants to enter the European market.
Mr. Nguyen Thanh Kien, Director of Guoi Kien Kien Cooperative, shared that Dutch customers came to learn about cooperatives' products, but the standard of agricultural products exported to the EU was very high, so their products not easy to access. For example, in terms of water resources, cooperative land must comply with European standards. According to Mr. Kien, in order to meet the process of soil treatment in the Netherlands, the land he planted now must be abandoned for 10-12 years to process. Meanwhile, their water sources and plant protection drugs also introduced strict regulations.
Need to meet the standard
When EVFTA came into effect, in the field of intellectual property, the EU recognized 36 items that protected Vietnam's geographical indications. Vietnam also needs to comply and fully recognize 160 product brands with EU product geographical indications.
Miriam Garcia Ferrer, Head of Economic and Trade Commission of the EU Delegation in Vietnam - member of the EU negotiating delegation, pointed out that in order to enjoy the advantages of tariffs as well as increase exports to the EU, Vietnamese enterprises must improve the quality and meet the standards of this market. For example, Vietnamese enterprises have to check for animal and plant quarantine for agricultural products, prove better products, because there have been bad information related to Vietnam's animal and plant safety issues at EU
Miriam Garcia Ferrer added that the EU is ready to provide technical assistance to Vietnam, to ensure that Vietnamese businesses can conveniently apply the terms that EVFTA offers. This guide, the relevant EU department, has been published since 2016 and is regularly updated. Vietnamese businesses can contact the European Chamber of Commerce in Vietnam to find out more.
Reported by Tieu My – Translated by Vi Bao
