As one of the potential markets for Vietnamese agricultural products, the EU market share for Vietnamese agricultural products has recently developed as much as expected.

Mr. Dinh Sy Minh Lang, European-American Market Department (Ministry of Industry and Trade) said at the Trade Promotion Workshop to the EU market, "Taking advantage of preferential opportunities for agricultural products from EVFTA in the new context ", organized by the Department of Trade Promotion on September 8.

The Vietnam - EU Free Trade Agreement (EVFTA) has positively impacted trade between Vietnam and the EU. In 3 years of implementing the EVFTA Agreement (August 1, 2020 - August 1, 2023), Vietnam has exported nearly 128 billion USD of goods to the EU. Tariff preferences in EVFTA are one of the favourable conditions to help Vietnam increase exports to the EU market, including agricultural products.

However, according to Mr. Dinh Sy Minh Lang, Vietnamese agricultural products entering the EU recently have not reached the expected growth rate, which still has much room. Businesses have not taken advantage of incentives from EVFTA due to the expectation of other tax incentives and conditions of origin of goods to enjoy tax incentives. However, these incentives will end in the short term, forcing businesses to take advantage of the EVFTA.

In addition to the above challenges, the representative of the European-American Market Department also said that Vietnam's agricultural products alone must face up to new and difficult regulations on the EU market.

The most significant is the EU's Green Deal on reducing emissions, combating climate change and sustainable development. In particular, the strategy from farm to table requires the circulation of products. Moreover, the circulation and export of products related to deforestation and forest degradation are also forbidden, along with stricter food safety and hygiene standards.

Faced with that reality, to effectively take advantage of tariffs from the EVFTA Agreement while overcoming the technical barriers of this market, Mr Dinh Sy Minh Lang said that businesses and producers need to update green and sustainable production methods to meet strict quarantine requirements. Regarding terms of tax incentives from EVFTA, agricultural businesses need to understand the rules of origin and apply them correctly to their export products. In addition, businesses need to study new European regulations such as regulations on sustainable development, green agreements, CBAM border adjustments, and EU food safety regulations.

Businesses need to note that once banned substances are discovered or exceed the threshold in the inspected goods according to EU regulations, the goods will be returned, and the EU will immediately warn the entire EU system, withdraw them from the shelves, and return them. In the future, it will be very difficult for these products to be exported back to the EU.

Also, according to Mr. Dinh Sy Minh Lang, up to this point, the EU market is still a large market with lots of room for Vietnamese businesses. To export Vietnam's essential agricultural products to the EU, such as pepper, cashew, and coffee, it is necessary to pay attention to the quality specification of the production area, which must be legal and controlled, green and environmentally friendly.

Mr. Tran Tuan Minh, Director of the Vietnam-Asean Trade and Investment Promotion Center, also said that the most crucial factor is reputation and product quality in export. Businesses need to stabilize the quality of every shipment to avoid the situation where the first batches are good and the later batches are of poor quality and are returned later on and customers are lost.

Additionally, Mr. Remi Nguyen, General Director of MLR Consulting Company Vice President of the French Chamber of Commerce and Industry in Vietnam (CCIFV), also analyzed risks of the business environment in the European market. At the same time, guidance on compliance with international standards on improving internal processes to meet export product requirements was also set up.

Ms. Nguyen Bich Thao, Country Director of Asean Business Partners Company, also informed about accessing the commercial working capital funding for export businesses, especially supporting small and medium-sized enterprises in Order financing, factoring, reverse factoring. In Vietnam, Asean Business Partners has supported several Vietnamese businesses exporting to the EU, from large orders to supporting businesses with orders of several thousand USD.

Source: Custom News

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