The Free Trade Agreement between Vietnam and the European Union (EVFTA) is expected to create a series of export opportunities for agricultural products, especially Vietnamese fruits. Businesses need to follow the traceability rules to seize opportunities to approach the EU market.
Potential of EU market
Currently, the EU is in top 4 largest export markets for Vietnam’s fruits and vegetables products, after China, the United States and Japan. After EVFTA available on August 1, the exemption of import tax on goods entering into the EU market will make an important contribution to improving the price competitiveness of Vietnamese fruits.
Challenges for businesses
Despite these benefits, Vietnamese businesses are still hesitant to enter the EU market due to technical barriers and strict regulations on pesticide products as well as strict censorship of chemicals which imposed by EU importers.
The EU market requires strict adherence to rules related to traceability
Mr. Dang Phuc Nguyen, General Secretary of Vietnam Fruit and Vegetable Association noted that companies must strictly adhere to the high standards set by the EU regarding food safety. This includes the limited use of pesticides to avoid product returns and negative impacts on the nation’s vegetable and fruit industry. He also stressed that traceability would be a mandatory requirement for fresh fruit and vegetable importers, adding that EU businesses would require all fruit exporters to fully comply with the rules related to traceability.
Filip Graovac, Deputy National Representative at Asia Foundation, said that Vietnamese companies have not yet applied the rules of product traceability effectively. By the way, they are still working very well to expand.
He emphasized the importance of new generation Free Trade Area (FTA) such as Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EVFTA, both of them bring opportunities to Businesses who are expanding into new markets. The corona disease situation in Vietnam is under control so this is especially true in the current context of the country.
Graovac noted that Vietnam has great potential for exporting high quality agricultural products as well as responsible producers, but the main issue is these advantages should be shown to importers to see.
Businesses should better understand the new provisions under EVFTA, including social benefits for workers and environmental protection.