Vietnam’s Minister of Industry and Trade Vu Huy Hoang and Ambassador and Head of the EU Delegation to Vietnam Franz Jessen, on August 4, announced the agreement in principle on the EU-Vietnam Free Trade Agreement (EVFTA) negotiations. Accordingly, 99% of taxes will be removed. Binh Duong-based businesses, especially ones in the fields of garment, footwear, electronics, woodwork…are very glad with the news as they will get more opportunities to deeply and widely penetrate into the EU market.
Increasing competitiveness
Binh Duong-based woodwork businesses will open their market to the EU zone when the EVFTA takes effect, according to Huynh Thanh Quang, Chairman of Binh Duong Furniture Association (BIFA). Surely, they will manage to make a lot of changes in business strategies at tough requirements of the EU market. They need to make efforts in order to increase their competitive ability for sustainable development in the market.
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Binh Duong’s woodwork industry will get big opportunities to penetrate into the EU market when the EVFTA comes in effect. In picture: Wooden products being processed at Kim Thanh A Company in Thuan An town
Also according to him, the U.S is the biggest importer of Binh Duong’s wooden products. But, the EU is likely to surpass the U.S in the field when the EVFTA takes effect.
Perhaps, the agreement in principle on the EVFTA negotiations is the greatest happiness for domestic garment and footwear sectors. Under the EVFTA, taxes to the two sectors will be removed. This will also help Binh Duong’s garment and footwear businesses to have enough competitiveness to other rivals. Vietnam is among the world’s top 5 garment exporters, but only accounts more than 10% of market share in the EU market.
Together with advantages, Binh Duong’s strong industries of garment-textile, footwear, woodwork, electronics…will face great challenges from the EVFTA. For a long time, Binh Duong has only exported its rubber products into Germany, but now they will have an opportunity to penetrate into 27 countries in the EU zone.
Challenges still remain
Binh Duong-based businesses will enjoy more opportunities to modernize their production technologies, contributing to promoting the local industrial development when the EVFTA comes into effect, according to Ho Van Binh, Deputy Director of provincial Department of Industry and Trade (DoIT).
Provincial DoIT predicts that capital from EU will strongly flow into Binh Duong as the locality has an abundant workforce, industrial parks with well-built infrastructure, wage cost that is lower than the common level of the Southeast Asian region... Great groups from countries that have not signed the FTA with EU yet will also come to Binh Duong to seek cooperation opportunities.
Le Hong Phoa, Chairman of Binh Duong Garment-Apparel Association said that opportunities and challenges will arise from the EVFTA. Initially, garment-apparel businesses will be not supported for costs on power, water, tax…from the Government. The province’s garment-apparel sector will also face big challenges as auxiliary industry for garment-apparel herein has not met requirements of businesses yet. There will be also more severe competitiveness in terms of workforce.
Currently, province-based businesses get ready to face challenges in order to further welcome opportunities from the EVFTA, developing Binh Duong into an industrial hub with the regional scale, Mr.Phoa affirms.
Reported by Phung Hieu-Translated by K.T
