After nearly two months of the EVFTA, seafood exports strongly increased but there were some problems for seafood enterprises.

According to Vietnam Association Seafood Exporters and Producers (VASEP), after more than one month of the EVFTA, in August 2020, the total seafood export value to the EU reached nearly US$ 98 million, a slight increase of 1% compared to the same period last year.

This results clearly reflected the positive impacts of the EVFTA on promoting exports of seafood products entitled to the preferential tax rate of 0% after the agreement takes effect, which are shrimp, octopus and squid. The export value of these products grew compared to the same period last year and July prior to the EVFTA.

Specifically, shrimp exports grew nearly 16% from the same period 2019, nearly 9% from July, 2020; squid and octopus exports grew 10% from the same period in 2019, nearly 24% from July, 2020

Many enterprises have received export orders. Mr. Ho Quoc Luc, President of the Management Board of Sao Ta Foods Joint Stock Company said that export orders mainly came from key customers who have been with the company for a long time. In particular, the export orders from the US market accounted for the highest numbers with an increase of about 10%.

According to Luc, the EU market brings a better profit margin than the US market. However, the output of Vietnamese shrimp sold to the EU is not remarkable because the number of certified farming areas for export to this market is very low.

Currently, Vietnam’s output of raw shrimp for export processing reached over 700,000 tons per year.

Shrimp processing enterprises can increase sales to the EU to take advantage of tax incentives from the EVFTA. However, EU consumers, especially the high-end market segment, require that exported shrimp must have safe farming certifications such as ASC certification for farming areas.

Exporters without the certifications can sell shrimp to the low-end segment with cheaper prices.

The above results show that enterprises have promptly grasped and applied the incentives of the agreement despite procedural confusion such as HS code declarations, declarations of certificates of origin form EUR1 and other documents in the initial implementation.

According to VASEP, some problems arising from the implementation of the EVFTA are: Confusion in the application of C/O form Eur1 of the business community and of the EU member states; the time for granting C/O because it involves certification under the IUU regulation and confusion in applying HS codes.

However, the problems have been resolved and guided by state management agencies immediately.

Seafood exports will reach nearly US$9 billion

Seafood experts said that the EVFTA is a good opportunity for Vietnamese seafood to increase exports and competitiveness in the EU. However, in order to take advantage of the tax incentives, the seafood industry needs to have stable safe, quality material sources that meet the EU market standards and regulations. The important thing is that enterprises know how to take advantage of the agreement's rules of origin effectively and flexibly.

In addition, enterprises need to pay special attention to implementing and meeting the regulations and standards of labor and environment described in the agreement and issues related to sustainable development. Fishery workers, especially child laborers, are an issue of particular concern in the EU and other countries.

According to VASEP, the EVFTA will be a lever to boost exports to the EU market in the last months of the year if enterprises make good use of opportunities and tax incentives. From now to the end of the year, Vietnam's seafood exports to the EU are project to be about US$3.4 billion.

According to Mr. Phung Duc Tien, Deputy Minister of Agriculture and Rural Development, fisheries exports by the end of August will reach US$5.4 billion, by the end of this year we will strive to achieve a turnover of US$8.9 billion. However, in order to take advantage of opportunities, enterprises need to identify the situation to give specific solutions in the remaining months, including increasing production to meet domestic demand and promoting exports of seafood products.

Along with that, to ensure sustainable exports, the leader of the Ministry of Agriculture and Rural Development also noted that when participating in agreements with many technical barriers, enterprises need to change production methods, conduct traceability and ensure food safety.
Exports to the EU reach nearly US$4 billion in the first month after EVFTA comes into effect

In which, it is necessary to have a good understanding of the standards, regulations and technical barriers of fastidious markets, thereby affirming the brand and position of Vietnamese agricultural products, especially seafood products.

Source: VN Explorer

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