The European Union (EU) is a main export market of Vietnam but it imposes strict regulations on consumer protection by means of various protectionist measures and policies. To update latest information about EU market, EU import trends, and business opportunities for Vietnamese businesses, the Vietnam Trade Promotion Agency (Vietrade) in coordination with the European Markets Department, both under the Ministry of Industry and Trade, organised a conference on “New opportunities and challenges in EU market, demands in selected markets” on September 24 in Hanoi.
Ta Hoang Linh, Deputy Director of Vietrade, said the EU is an important trading partner of Vietnam. The bilateral trade relations have thrived in recent years. The two sides are negotiating the Free Trade Agreement (FTA) and expecting to conclude it by the end of 2014 so as to open up more opportunities in the EU market for Vietnamese goods. Up to 90 tariff lines will be subjected very low, even at zero, on goods from Vietnam like garments - textiles, leather - footwear, food, and especially agricultural products and seafood. Therefore, Vietnam enterprises must take advantage of every opportunity to penetrate this market.
In 2013, the two-way trade advanced strongly. Vietnam earned US$24.4 billion from exports to the EU. Vietnam’s exports were mainly labour-intensive products like electronic devices, telephones, footwear, apparels, coffee, seafood and furniture. Meanwhile, Vietnam imported high-tech products, like steamers, mechanical equipment, machines, electric equipment, pharmaceuticals and vehicles. Vietnam increased products with higher content of technology and reduced crude products exported to the EU.
So far, 23 out of 28 EU-member states have invested in Vietnam as of June 2014, with 1,471 projects and US$18.38 billion. EU-led projects mainly focus on processing and manufacturing industries; electricity, gas and water production and distribution; information and communication; and real estate business. Also by the end of June 2014, Vietnam had 47 investment projects in 11 EU countries with a total registered capital of US$115 million.
Remarking on opportunities generated by the Vietnam - EU FTA, Ms Maylis Labayle, Advocacy Manager of European Chamber of Commerce in Vietnam (Eurocham), said that, once concluded, the Vietnam - EU FTA will boost up Vietnam’s gross domestic product (GDP) significantly. In addition, the FTA is expected to boost up Vietnam's exports to the EU by 30-40 percent and its imports from the EU by 20-25 percent.
Another benefit for Vietnamese exporters when the trade pact is signed is technology transfer and training support, which will enhance the competitiveness of Vietnamese products in this market in the EU, she added. Vietnam goods will also have the opportunity to export to other countries around the world.
However, she noted that the agreement will present Vietnamese companies with a number of challenges since they have to meet strict European requirements on product quality and consumer protection.
Mr Nguyen Manh Dung, an official of the Agro-Forestry, Seafood Processing and Salt Industry Department under the Ministry of Agriculture and Rural Development, said Vietnam’s agricultural exports to the EU include coffee, black pepper, cashew nuts, tea, vegetables, fruits, grains and furniture. Agricultural exports to this market are always stable and little affected by ongoing public debt crisis.
He said requirements and standards for imports into this market are getting higher and higher. Consumers here do not accept low or medium-quality goods. Therefore, products made by socially and environmentally irresponsible companies will have their footing shaken in this market. Besides, major agricultural products consumed in the EU like coffee, tea, vegetables, spices and fruits must satisfy freshness, flavour and quality requirements.
Mr Dung also pointed out difficulties facing Vietnam's exported agricultural products in the EU. Vietnamese businesses usually have small scale, possess outdated infrastructure that results in low labour productivity, and have low product competitiveness. In addition, they have to meet rigorous quality, hygiene and food safety standards. In 2012, Vietnam’s fruit and vegetable export growth slowed because many batches violated EU laws.
He recommended that opportunities are always available for Vietnamese businesses to export agricultural products to the EU but they must importantly understand market characteristics thoroughly to work out specific strategies and plans to satisfy strict consumer demands. Last but not least, they must pay attention to social and environment responsibility.
Ha Vu
Vietnamese
