Vietnam has a number of small and medium-sized enterprises (SMEs) accounting for 97% total number of enterprises nationwide, the "hearts of the economy" need a help to implement EU-Vietnam Free Trade Agreement (EVFTA) effectively.
Technological innovation, trade promotion through digital economy are opportunities for enterprises to effectively apply EVFTA. In photo: Production activities at Thanh Danh Dat Mechanical Company.
A big opportunity
EVFTA is considered as the saver that could bring more diverse market opportunities for businesses, helping businesses regain post-pandemic growth momentum, especially for SMEs. Luong Hoang Thai, Director of Multilateral Trade Policy Department (Ministry of Industry and Trade), said that the additional interaction between EU and Vietnam is clearly shown in the agreement. This is also an opportunity that Vietnamese SMEs need to seize. According to Mr. Thai, EU is a model to protect geographical indications for households, this is a model suitable for SMEs in Vietnam. The sustainable development commitments that Vietnam has made in EVFTA will also mean that Vietnamese enterprises will no longer have to be bothered as applying for technical certificates as previous trade agreements.
Regarding evidence of opportunities, Tran Thanh Hai, Deputy Director of Import and Export Department (Ministry of Industry and Trade), said that EVFTA, even if there are thousands of pages in this FTA, every Vietnamese SME can find their own 1- 2 pages for implementation together with the business community. EVFTA can be considered as a sustainable tax reduction document. Especially due to effects of the Covid-19 pandemic, some goods items could be benefited immediately. Besides, during the implementation of EVFTA, the EU will apply an early harvesting mechanism (REX) that allows businesses to certify themselves product origin. This is what businesses need to know to benefit themselves.
Nguyen Van Than, Chairman of Vietnam SMEs Association, said that the opportunities brought by EVFTA would be accompanied with difficulties and challenges. To utilize these opportunities, enterprises need to pay attention to strategies, plans and prepare for development in the new market conditions and context.
Le Van Hiep, Head of Interim Advocacy Binh Duong SMEs Association, said that the establishment of this association would be an opportunity to complete the supply chain, strengthen development links between SMEs in Binh Duong. In the new market conditions and context, together with the favorable traditional investment environment, SMEs will have a great opportunity to break through.
To utilize opportunities to adapt
A question posed at the conference "Supporting SMEs to take advantage of opportunities, effectively implement EVFTA" held by Ministry of Industry and Trade in collaboration with Vietnam SMEs Association (VINASME) was that whether Vietnamese SMEs are stuck in EVFTA's commitments? The answer was that Vietnamese SMEs are able to fully adapt to EU standards and trade costs, which are among the highest in the world. This also means that EVFTA's commitments can fully spread to SMEs, contributing to economic and social stability, avoiding the conflict of interest as happened in many countries.
Referring to the challenges faced by SMEs, Vu Ba Phu, Director of Department of Trade Promotion (Ministry of Industry and Trade), said that EU is a big market but it requires strict quality standards, food hygiene safety, labor, environment etc. that not all enterprises could satisfy. The next difficulty for Vietnamese enterprises when conducting trade promotion activities in the EU market is the language barrier, cultural differences as well as limited understanding of regulations in this market. Nguyen Van Than recommended to further accelerate administrative procedure reform, enhance communication, increase resources, loans and create favorable conditions for EVFTA projects, cut bidding criteria so that SMEs would have opportunities to participate, to apply science and technology...
Minister of Industry and Trade Tran Tuan Anh said that it would be included in the Government's action plan to implement EVFTA. Implementation of this agreement is also a specific story of each locality and enterprise. Nguyen Thanh Toan, Director of Binh Duong Department of Industry and Trade, said that the department made effort to assist businesses in the access to information and policies of FTAs, including EVFTA. At the same time, grasping the obstacles in export, creating maximum favorable conditions for businesses to participate in cross-border trade.
EU is the 2nd largest import market in the world. Every year, EU imports about $2,338 billion, while Vietnam's export market share in the EU is about 2%. More than 42% of Vietnam's export turnover to the EU is entitled to 0% tax rate under the universal tax incentive program (GSP). Therefore, with EVFTA's strong commitments to market opening and eliminating import taxes to nearly 100% of tariff, the opportunity to increase our exports is huge, especially for advantageous goods, such as textile, footwear, agricultural and aquatic products, timber furniture...
Reported by Tieu My - Translated by Ngoc Huynh
