EVFTA: "To have a good harvest, you have to get up early to go to the fields"

06/07/2020    198

With the Vietnam-EU Free Trade Agreement (EVFTA), Deputy Minister of Industry and Trade Tran Quoc Khanh emphasised: “Enterprises also need to actively study thoroughly the content of the agreement and standards, fully equipped with manpower and resources, do not let foreign enterprises take full advantage. If you want a good harvest, you have to get up early to go to the fields.”

Access to markets of 450 million people

According to the Ministry of Industry and Trade, the Covid-19 pandemic situation has greatly affected the economic and trade situation. Regarding trade, by the end of May 2020, total import-export turnover of the whole country decreased by 2.8%; in which exports fellby 0.9%; imports decreased by 4.6%.

Speaking at the conference "Effective utilization of the EVFTA: Development opportunities for Vietnamese businesses after the Covid-19 shock" on June 29, Deputy Minister of Industry and Trade Tran QuocKhanh assessed, in the current situation, when the EVFTA is put into effect, it will create more motivation for Vietnamese enterprises to recover and develop their business activities.

Specifically, with the EVFTA, Vietnamese businesses will have the opportunity to access amarket of nearly 460 million people with an average GDP of more than 35,000 USD, with a tax rate of 0% from the moment the agreement comes into force for more than 85% of tax lines.

“In addition, businesses can join new supply chains to replace traditional supply chains that have been disrupted or stalled by the Covid-19 pandemic, while expanding and diversifying over the market. import-export market, reducing the dependence on a certain market group,”Khanh said.

However, leaders of the Ministry of Industry and Trade also emphasisedthat in order to realisethe opportunities, the Government and businesses still need to performa lot of preparation.

For the Government, ministries, branches and relevant agencies should quickly complete the implementation plan as well as issue the necessary legal documents, and at the same time enhance dialogue and exchange with the community of enterprises to remove obstacles and difficulties in production and business activities.

“Enterprises also need to actively study thoroughly the content of the agreement, fully prepare manpower, finance as well as other necessary conditions to be able to meet requirements not only of the agreement but also of the whole EU market. Enterprises need to increase the activeness more, do not let foreign enterprises take full advantage. If you want a good harvest, you have to get up early to go to the fields,” Deputy Minister Tran Quoc Khanh emphasised.

At the conference, Ngo Chung Khanh, Deputy Director of Multilateral Trade Policy Department (Ministry of Industry and Trade) added that the expected time for the EVFTA to take effect is from August 1, 2020.

Regarding the EVFTA implementation plan, Khanh stated the first thing is communication and dissemination. The forms of communication conducted by the Ministry of Industry and Trade are quite diverse, not only as conferences and training courses as traditional but also online training courses; not only propaganda through the press but also opening more social channels.

The Ministry of Industry and Trade is setting up a FTA-specific social network to exchange and update relevant information.

“Remarkably, to prepare for the implementation of EVFTA, the Ministry of Industry and Trade has established a Zalo group connecting ministries, branches as well as provinces and cities. From the overall plan of the Ministry of Industry and Trade, localities will build their own specific action plans. Typically, the case of TienGiang province made a good plan, shared on the Zalo group, from which the provinces learned from each other. That's quite a new point compared to the implementation of the Comprehensive Partnership Agreement and Trans-Pacific Progress (CPTPP) before,”Khanh said.

Do not be too optimistic with EVFTA

The leaders of the Multilateral Trade Policy Department particularly emphasised the EVFTA also having fournotable points for businesses.

First, the interest of businesses in theEVFTA is limited. Recently, the Ministry of Industry and Trade has opened an online training course on threecontents: Tax and market access, rules of origin, investment services. The number of registered businesses is limited. Especially regarding market access and taxes, most students are re-registered.

Businesses also need to increase initiative and prepare to make best use of opportunities from EVFTA. 

Inquiries from businesses are also quite general. "We would like to receive questions like how to export this product, what kind of support is needed, but almost no," Khanh said.

The second note mentioned by Khanh is coordination and connection between enterprises and State management agencies. Currently, the Ministry of Industry and Trade has connected via the web, phone and conference to support businesses to make better use of the EVFTA.

According to Khanh, the third note is that you should not be too optimistic with the EVFTA. Currently, there areunpredictable developments in Covid-19 in the EU. On August 1, tneEVFTA takes effect but businesses cannot export immediately and collect money, in fact there is much work to be done. Enterprises should be cautious when assessing the agreement.

“In the end, we have been changing the working mindset, more positively for business. In contrast, we also expect businesses to change the way, change the mind. Besides the EVFTA, businesses also do not forget CPTPP. This is also a very good market and the room is still quite large,”Khanh emphasised.

Source: Customs News