EU-Vietnam FTA: Many Tariffs Preferences for Exporters

In the opening speech, Director of VCCI – HCM, Mr Vo Tan Thanh said that over recent years, Vietnam-EU trade has shown positive signals. Starting from early 2014, EU has officially adopted the GSP for Vietnam exports, contributing to the improvement of Vietnamese goods’ competitiveness in the EU market. Currently, the negotiation of EU-Vietnam FTA is at the seventh round already and expected to be concluded later this year. When reached, the FTA would help create a clear legal framework, establishing a solid ground for businesses to build long-term business strategy.

 

Also focusing on the benefits of the EU-Vietnam FTA, Mr Jaen Jacques Bouflet said because GSP was the unilateral preference of EU for Vietnam, it must be subject to approval every three years and as a result, preferential items would be altered every now and then. Therefore, although Vietnamese commodity currently enjoys EU's GSP, enterprises should always be prepared that there might be a chance for their goods to be taken out of the GSP list. However, there’s a good thing that by the time the EU-Vietnam FTA is signed, enterprises’ concern that export goods will no longer enjoy the generalised system of preferences (GSP) will be alleviated because the EU-Vietnam FTA itself will bring more tariffs preferences than the GSP. The important issue now is that Vietnamese enterprises should not let themselves miss any opportunity brought by the FTA by keeping themselves fully and frequently updated with information and developments from this potential market. Being well-informed about the EU market not only made it easier for businesses to capture the market, but also helped them to improve the compliance of laws, standards and regulations as well as technical requirements for imported goods to the EU market.

 

Aside from those certain advantages, according to Dang Hoang Hai, Director General of Department for European markets (Ministry of Industry and Trade), exporters when getting into the EU market also faced difficulties due to this market’s strict requirements on quality, technical regulations; difficult financial negotiating; large supply. Especially, businesses also faced the risk of becoming dependent if they failed to establish their labels and brand. “Exports directly into the European distribution system are the sustainable direction for Vietnamese exports in the future of FTA. Vietnam goods which have export experience, strong corporate internal strength, clear development strategies will be those can take advantage of this direct export channel,” affirmed Mr Hai. At first, enterprises might be attacked by difficulties due to expensive initial investment, but once succeed; Vietnamese enterprises would have a sustainable and stable output market. The important thing is enterprise must stay positive, proactively request support in technical issues, standard information, market information, customer tastes from distributors to ensure their products in accordance with the EU’s regulations, with importers’ requirements and accepted by consumers. In addition, Vietnam enterprises should also think about cooperation early on with distributors from production stage if their goods were not yet capable to build its own label.

 

Speaking from his own experiences in conquering the EU markets, Mr Hoang Van Hue from Go Dang JSC said with export sales to this market accounted for 60-70 percent of total export earnings, the EU market was considered a potential market for Go Dang and also for other Vietnamese exporters. However, according to Mr Hue, technical barriers were always the toughest challenge for Vietnam’s business community when exporting to that market, especially when European requirements on import policy, product criteria had been getting more and more demanding. Besides, the time-consuming process of product quality certification also dissatisfied customers.

 

Regarding those specific difficulties, Mr Hue called for the State management agencies to take measures to support exporters in concessional resources, legal policy, reforming relevant administrative procedures to be more efficient; promoting the signing of EU-Vietnam FTA and other bilateral agreements with other countries to help businesses, creating favourable conditions for Vietnamese businesses to approach the EU market, as well as other potential markets.