test
28.8 C
New York
Friday, June 14, 2024

Buy now

spot_img

EU market and opportunities for Vietnamese agricultural products

EU market and opportunities for Vietnamese agricultural products

Opportunities for Vietnamese agricultural products to enter the EU market

EU market and opportunities for Vietnamese agricultural products. After the Free Trade Agreement (EVFAT) and the Investment Protection Agreement (EVIPA) were ratified by the National Assembly in February 2020. This, of great significance, officially puts the EVFTA Agreement into effect after Vietnam and the EU carry out the necessary exchange procedures according to regulations.

The two agreements EVFAT and EVIPA have strongly affirmed the relationship between Vietnam and the EU after 30 years of establishing diplomatic relations. Political cooperation is increasingly tightened. At the same time, economic cooperation is a bright spot with the EU becoming Vietnam’s third largest trading partner and Vietnam being the EU’s second largest trading partner in ASEAN.

At the conference “Supporting businesses to take advantage of opportunities to develop agricultural, forestry and fishery exports to the EU market, effectively implementing the Vietnam – EU Free Trade Agreement (EVFTA)” jointly organized by the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development (MARD) and the People’s Committee of Ho Chi Minh City on June 30, released information: “It is expected that from August 1, 2020, thousands of Vietnamese food, agricultural products and many other goods exported to the EU market will have a tax rate of 0%” according to the preferential tariff provisions of the EVFAT Agreement.

After the COVID-19 pandemic, this is a “golden” opportunity for many businesses in Vietnam’s agriculture, forestry and fishery industries to revive the economy, creating a spectacular boost.

Market “billion USD” in EU for Vietnamese agricultural products

EU market and opportunities for Vietnamese agricultural products. In 2019, the total import and export turnover between Vietnam and EU members (28 countries, the time when Britain had not left the bloc-PV) reached 56.39 billion USD, accounting for nearly 11% of the country’s total import and export turnover in 2019.

In which, export turnover to the EU reached 41.48 billion USD, although down 1% compared to 2018 but still accounted for 15.7% of the total export turnover of the country. While Vietnam’s imports were 14.91 billion USD, up 7.4%, accounting for 5.9% of the country’s turnover.

Although the EU is Vietnam’s second largest export market, Vietnam only accounts for about 2% of the EU’s total imports. Therefore, this has an opportunity to increase exports, especially for agricultural, forestry and fishery products.

Golden opportunity and strong push for Vietnamese agricultural products to enter the EU

After the EVFAT comes into effect, Vietnam’s export of agricultural, forestry and fishery products will be able to access a potential market with a population of more than 500 million people with a tax rate of 0% and a GDP of 15,000. billion USD.

Before the EVFAT agreement was signed, the EU tax rate on Vietnamese rice was up to 175 EUR/ton for milled rice, 65 EUR/ton for broken rice, and 211 EUR/ton for paddy. This is a huge obstacle for Vietnamese rice as rice from Cambodia and Myanmar is tax-free and not subject to quotas.

Therefore, Vietnam’s rice exports to the EU (excluding the UK) in 2019 only reached 10.7 million USD. Rice export output in 2019 compared to 2018 increased by 92.4% but only reached about 15,000 tons, not much compared to over 6.3 million tons of rice exported for the whole year.

But under the EVFTA commitment, the EU will give Vietnam a quota of 80,000 tons/year for milled rice and fragrant rice with a tax rate of 0%. Particularly for sheet products, there will be no more quotas and tax will be eliminated in 5 years.

According to the Ministry of Industry and Trade, exports to the EU only accounted for 0.38% of the country’s total rice export turnover. Meanwhile, the EU’s average rice consumption is about 2.5 million tons/year in the period 2016-2020.

Thailand, the US, and Australia are competitors of Vietnamese rice and are allocated a large amount of tariff quotas. Therefore, when the EU grants Vietnam a quota of 80,000 tons of rice per year, including 20,000 tons of milled rice, 30,000 tons of milled rice and 30,000 tons of fragrant rice, there is an opportunity for Vietnamese rice to increase its presence in this market.

In addition, “as soon as the EVFTA comes into effect, 50% of the tariff lines on Vietnamese seafood entering the EU will be eliminated (currently applied tax is 6-22%), the remaining 50% of tax lines will be reduced to 0% from 3 months. -7 years” According to Mr. Truong Dinh Hoe – General Secretary of Vietnam Association of Seafood Exporters and Producers (VASEP),

Particularly for canned tuna, the EU gives Vietnam a quota of 11,500 tons/year with a tax rate of 0%. “This quota is more than three times higher than Vietnam’s tuna exports to the EU today. Therefore, this is a huge space for this item to enter the EU in the near future,” said Mr. Hoe.

According to the Ministry of Industry and Trade, in the past 10 years, Vietnam’s agricultural, forestry and fishery exports to the EU have grown steadily but not high compared to the US and China, reaching an average of 6.7% per year, from 4.49 billion USD in 2008 increased to 3.96 billion USD in 2019.

EU market and opportunities for Vietnamese agricultural products. When the EVFTA comes into effect, it is expected to bring many opportunities for Vietnamese exporters, creating a push to promote the strong growth of trade in the agricultural industry between the two sides.

Source: tuoitre.vn

Emilia Chaney
Emilia Chaneyhttps://agrisearch.net
My name is Emilia Chaney. I'm a social girl from Romania with a big smile and 3 passions: Agriculture, Travel and Social Media. I try to make this blog practical, full of great advice and inspiring ideas.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -spot_img

Latest Articles