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Factors affecting the export of Vietnamese fruits and vegetables to the EU under the EVFTA agreement

Vietnamese fruit and vegetable export

After the EVFTA trade agreement was approved, creating opportunities for Vietnam’s agricultural, forestry and fishery products, especially the export of Vietnamese vegetables and fruits to the EU market.

1. Make a problem

In the 5 years from 2014 to 2018, the total amount EU imported vegetables always growing, accounting for a large proportion (over 40%) of total global imports. Although Vietnam’s fruit and vegetable exports in general and exports to the EU in particular have achieved a fairly large growth rate (an average increase of 20.76% per year), the export value accounts for a low proportion (in 2018 it accounted for nearly 1% of the EU’s total import of vegetables and fruits (USD 13.8 billion) is not commensurate with the potential and advantages in production – supply and export of this commodity group.

In that situation, the EVFTA Free Trade Agreement signed (June 2019), approved by the EU House of Representatives (February 2020) and implemented will create new opportunities for export trade development. import and export of EU – Vietnam in general and import and export of fruit and vegetable products in particular. At the same time, it also establishes urgent requirements that are important in policy making, organization and effective implementation of solutions for export development of commodity groups. First of all, business managers, Vietnamese fruit and vegetable import and export enterprises must identify factors impact – core factors, prerequisites for export development, supply value enhancement and export value-added in the new business context with the simultaneous impact of global trade liberalization, the trend of trade protectionism of major countries and multilateral and bilateral trade agreements, especially the EVFTA free trade agreement.

2. Some theoretical foundations of research

* Definition and classification of exported fruit and vegetable products

The group of exported fruits and vegetables is the entire list of fresh and processed vegetables, tubers and fruits that a country/enterprise exports to foreign markets measured through the following four structural parameters: width (indicates the number of different commodity groups); depth (the total number of types and options of items satisfying the same need); length (the total number of product names in the total of the total product list); compatible durability (indicates the close correlation and correlation ratio between groups of items); ensure to meet the requirements of quality – time – cost – export services according to the demand dynamics of the target export market.

In the current import and export trade, vegetables and fruits are classified according to the HS system of the WCO (International Customs Organization) including 3 groups: edible vegetables, some roots and tubers (HS 07); group of edible fruits and nuts (HS 08); group of products prepared from vegetables, fruits or other parts of plants (HS 20).

* Concept of export development of fruit and vegetable products

In developing countries, the concept of export development in general and the development of groups of exports with comparative advantages in particular is currently sustainable export development to meet economic and business objectives. export groups of goods and the combination with ensuring the goals of social stability development, protection of the ecological environment.

Accordingly:

One is, the economic and business objectives of exporting vegetables and fruits must ensure the sustainable growth of the total value of export turnover; Appropriately develop the structure and export market; Improve product competitiveness and export barrier ability; Improve the capacity to participate in the global export value chain and the efficiency and added value of fruit and vegetable exports.

Two is, the goal of exporting vegetables and fruits must ensure the sustainable development of the agricultural production industry, contributing to job creation, improvement of working conditions, improvement of people’s qualifications, income and quality of life; ensure the interests and interests of employees, businesses and social communities participating in the production and export process of fruit and vegetable products.

Three is, the goal of exporting vegetables and fruits must ensure the sustainable development of the ecosystem; exploitation and conservation of natural resources (land, water sources, plant varieties,…); protect the environment and minimize pollution as well as the impacts of climate change, etc.

* Factors affecting fruit and vegetable export

From the reality of the development of forces, factors affecting the export of goods in general and the expected level of their impact when the EVFTA is implemented, it is possible to identify 3 groups of main factors affecting exports. Vietnamese fruits and vegetables to the EU include:

– Commitments in EVFTA and regulations in the management of fruit and vegetable import of the EU. These are the factors that create the environment and conditions for fruit and vegetable products to enter the EU market such as commitments and regulations on tax; technical and environmental barriers, quarantine measures, food hygiene and safety; Theoretical guidelines and intellectual property…

– Market demand and potential of EU fruit and vegetable import. Factors such as the increase of demand in quantity (volume and value of consumption) and high demands on quality, food hygiene and safety; supply capacity within the EU, requirements on structure, quality, value of export services and competitiveness of the EU fruit and vegetable market, etc. are factors that directly affect exports. fruits and vegetables of exporting countries.

– Product competitiveness and export supply capacity of Vietnam’s vegetables and fruits. These are the agents demonstrating the ability to integrate resources and solutions to exploit the advantages in production and processing and the conditions in the supply and export of vegetables and fruits to improve the competitiveness and position of the country. products and maximize the export value of Vietnamese fruit and vegetable products in the EU market.

The mechanism and level of impact of 3 groups of agents are depicted through the diagram in Figure 1.

3. Identify the influencing factors

3.1. Commitments in EVFTA and EU import management regulations

The implemented EVFTA will create new opportunities for EU-Vietnam bilateral trade. For the group of fruit and vegetable products that Vietnam exports to the EU, the main factors include: (1) Basically, most import and export taxes will be eliminated as soon as the EVFTA comes into effect (94% of the total 547 tariff lines), in which mainly products are currently subject to the MFN tax rate of 10% and a part with the tax rate of 20%; (2) Currently, there are 39 geographical indications (mainly agricultural products and fruits (such as: Moc Chau tea, Buon Ma Thuot coffee, Doan Hung pomelo, Thanh Ha litchi, Hoa Loc sand mango and dragon fruit, etc.) ) is protected by the EU without following the normal process; (3) Regarding plant and animal quarantine (SPS) with products of plant origin in general, fruits and vegetables in particular must comply with SPS regulations very strict in farming, production and maintaining a quick warning system, the EU also creates a number of advantages for import and export between the two sides such as: a list of export enterprises that meet the requirements proposed by the two sides. ; recognition of equivalence; flexible regulations with SPS measures issued by the EU that are difficult for Vietnam to meet (by the options Vietnam chooses); unifying procedures and conditions on food hygiene and safety ;… has created great opportunities for the development of Vietnam’s fruit and vegetable exports.

In addition to these opportunistic factors, EU countries increase the use of tools and measures to protect consumers and domestic producers without violating bilateral and multilateral commitments such as barriers. technical barriers (TBT), regulations on environmental quality standards, food hygiene and safety, animal and plant quarantine regulations, etc. Typically, regulations on maximum residue levels of pesticides in and above fruit and vegetable food; regulations on social responsibility, environmental protection and intellectual property are the factors that create great challenges for Vietnam’s fruit and vegetable exports.

3.2. Market demand and efficiency of EU fruit and vegetable imports

The EU market consists of 28 countries with about 510 million people with a total GDP accounting for a quarter of global GDP (more than 15 trillion USD) with diverse and different needs in terms of consumption behavior and types of fruits and vegetables. The average annual consumption of vegetables and fruits is quite large: consumption of vegetables is from 115 to 130 million tons/year, fruit consumption is from 70 to 85 million tons/year. EU consumers have high requirements on origin, quality, food hygiene and safety for consumer health and environmental protection; prefer to use a variety of types and reputable brands, especially specialty vegetables and fruits of the exporting country; concerned with the quality-price relationship and the social responsibility of manufacturers and exporters.

Although the total import value is quite large, the EU has always had a trade deficit, in which the largest trade deficit is fruit and edible nuts (in 2018 the EU had a trade deficit of -23, 3 billion USD). The EU mainly imports vegetables and fruits from countries in the EU and near the EU such as the Netherlands, Spain, Italy, France, Turkey, Poland, etc. The import rate from non-EU countries is still low (accounting for nearly 2 million USD). 8% in 2018), including fruits and vegetables from some developing countries in Southeast Asia such as Thailand, Indonesia, Vietnam, etc. Competition in the EU fruit and vegetable market is increasing in terms of market share. competitive scope, achieving great competition intensity. Thus, the development of market demand (domestic and export); production and supply capabilities within the EU; The intensity of market competition and the competitive advantages of fruit and vegetable exporters to the EU are the factors that directly affect the product development, market expansion, and increase in supply value and price. added value of Vietnam’s exports of this commodity group.

3.3. Product competitiveness and export supply capacity of Vietnamese fruit and vegetables

According to ITC data and an assessment of the Ministry of Industry and Trade in 2019, Vietnam’s export turnover of fruit and vegetables to the EU in the last 5 years increased by an average of 20.76%. In which, the main export products are fresh fruits (up 22.89%/year) and the competitive advantage index (RCA) reached 3.66 points, higher than fresh fruits of China, the United States, and Thailand. Lan, Indonesia. Many Vietnamese fresh fruits have positioned themselves in a fairly competitive position in the EU market, while the competitiveness of vegetable and processed products is still low. The export supply capacity, which is mainly reflected in the supply value and the added value of exports, is not large enough, not commensurate with the investment in development of resource factors in production (the development of cultivation area; seed and farming technology; preliminary and processing technology; …) and in export supply (capability to meet diversified requirements in terms of structure to improve product quality; develop market market and improve the value provided to customers;…).

In the business context in the coming years, export managers and exporters need to identify and forecast this group of factors, first of all from forecasting EU import market demand for each commodity group. identify the factors to: (1) Increase the suitable vegetable and fruit farming area (currently just over 1.8 million hectares), choose to develop seedlings (especially with vegetables and fruits with competitive advantages). paintings, regional specialties); (2) Application of scientific and technological achievements in preliminary processing of products; (3) Develop product portfolio, ensure product quality according to EU and international regulations and standards; (4) Identifying opportunities from the latest generation of FTAs, EVFTA, to integrate resources to improve the export value capacity of fruit and vegetable products; (5) Identification of agents to develop sustainable fruit and vegetable exports and protect the ecological environment. These are the core factors and prerequisites to develop the competitiveness and supply capacity of Vietnam’s fruit and vegetable exports to the EU market in the coming time when the EU market is more competitive. much more than it is now.

4. Conclusion

In order to make policies and implement solutions to achieve the development goals of Vietnam’s fruit and vegetable exports to the EU in the coming time in the context of the implementation of free trade agreements, especially EVFTA, it is urgent to require The import-export business management system and Vietnamese exporters must not only properly identify but also measure the exact and comprehensive impact of the above-mentioned factors.

Due to the limitations of research time, data sources, collected data, the author’s article focuses on identifying and evaluating in the most general way the impact of three main groups of factors affecting the exporting Vietnamese fruits and vegetables to the EU in the coming time. Therefore, the article will inevitably have limitations and pose requirements for the author’s further research.

Source: http://tapchicongthuong.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.

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