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Export-Import

Last updated: Thursday, November 16, 2017

 

Flexible Adjustments to Export Standards Needed

Posted: Monday, August 21, 2017


Although Vietnam’s export value is growing quite high, many items are still returned by foreign importers because of quality issues. According to economists, Vietnam's commodity standards are far below the world's standards. The immediate solution is revising standards and updating technical barriers for each specific item in each specific market for exporters to access.

Strict demands from all markets

The United States is one of the main export markets of Vietnam. According to the US Food Safety Modernisation Act (FSMA), each exporting facility must be registered with the US Food and Drugs Administration (FDA) once every two years to get new codes. It is required to appoint a representative located in the US who the FDA can contact. According to recent FDA statistics, Vietnam has 1,485 licensed FDA-approved business facilities, but qualified facilities have now fallen to only 806. The rest of businesses have their business codes cancelled because they failed to perform re-registration or filed incorrect procedures.

In 2017, the FDA revised FSMA. Accordingly, Vietnamese exporters must have an import partner or a representative in the US to confirm the registration of their production facilities. Thus, this representative will be responsible for verifying that imported foods meet current US safety standards. This regulation was effective from May 30.

The European market requires regulatory import standards. But, recently, there has been a shift from public management to private management: Standards come from buyers and are managed by associations that they set up. These standards are built for each of different chain links, requiring sellers to be more active to ensuring the safety and sustainability of supply chains. In Europe, apart from food safety, buyers are responsible for paying close attention to social security and respect to the environment.

In the European market, Vietnamese exporters should pay attention to two criteria: General standards and specific standards. General standards are mandatory. If commodities do not meet this threshold, they will be refused entry, returned or even destroyed at the port of entry and exporters will be banned from exporting into this market for a certain period of time or for good.

Specific standards are voluntary, for example, occupational health, employee equity, environment-friendly production practices, and animal welfare (humanitarian sanctions, standardised transportation, etc). These standards will be added extra points to give preference to goods selected.

Japan is a very demanding market. Exporters not only have to prove the origin/traceability of every material, but they also have to list the processing time, wages, worker age of over 18, high safety and hygiene, disease-free land certification and clean production certification to be exported to this market.

Without doubt, if failing to meet strict requirements on packaging, traceability, quarantine, sampling and continuous inspection of importing markets, it will be very difficult for Vietnam to export into sophisticated markets. Therefore, ensuring quality and safety standards must be given top priority.

Defining new commodity standards

Specialists point out four important hazards that Vietnamese commodities commonly face: biological hazards (including parasites and pathogens), chemical hazards (radioactivity, pesticide, toxic residue, natural toxins, food degradation, additives, prohibited colourants and food allergens); physical hazards (glass or metal contamination); and accidental or deliberate hazards aimed for economic gain (counterfeiting, imitation, etc.)

Mr Dao Duc Huan from the Institute of Policy and Strategy for Agriculture and Rural Development under the Ministry of Agriculture and Rural Development, said this risk assessment includes not only checking commodities at port but also checking material, farming practices, processing, production and packaging, labelling and transportation, production conditions and occupational hygiene. To catch up and integrate with the rest of the world, Vietnamese manufacturers need to follow clean production processes from A to Z.

Mr Claudio Dordi, chief advisor at EU-MUTRAP Project, said, 99 per cent of imported coffee in Europe comes from Vietnam but a few consumers know this. European consumers liken Vietnamese and Chinese goods, which makes it more difficult to export Vietnamese goods to this market. The difficulty worsens when importing countries simultaneously raise quality control barriers.

To have a way out for this issue, according to Claudio Dordi, Vietnamese exporters need to urgently focus on upgrading technology and attaching importance to building strong brands. In addition, they need to update information about import policy changes in target markets.

The introduction of new technical barriers makes it necessary for businesses to flexibly adjust product quality criteria. Authorities should redefine standards. Ms Nguyen Phuong Mai, Advisor to UNIDO CSR Project in Vietnam, said that businesses need to affirm their reputation by exercising corporate social responsibility because partners are willing to pay higher prices for those performing CSR.

Mr Alain Chevalier, Senior Technical Advisor of the Programme for “Enhancing export competitiveness for small and medium enterprises in Vietnam through local trade promotion system”, introduced international ICT standards map - a software that helps Vietnamese exporters to quickly learn main characteristics, requirements and policies related to exports, compare commodity competition standards and self-assess corporate competencies.

Mr Tran Van Tung, Deputy Minister of Science and Technology, said that Vietnamese management agencies will promptly build, issue, and standardise food safety standards in line with current regulations on food standard compliance in countries in the world.

Huong Ly








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