In addition to contributing significantly to Vietnam's export growth to the EU market, the EU-Vietnam Free Trade Agreement (EVFTA) is also considered an important factor creating a rebound for bilateral trade relations after the Covid-19 pandemic, especially when the EU economy is forecasted to recover strongly in the first half of 2022.

Golden opportunity to sign contract

The EVFTA officially took effect on August 1, 2020. Since then, more and more businesses have taken advantage of the agreement's incentives through the use of preferential Certificates of Origin (C/O). The latest statistics of the Import-Export Department (Ministry of Industry and Trade) show that, in the first year of implementing the agreement, agencies and organizations authorized to issue C/O form EUR.1 have issued about 207,682 C/O sample EUR.1 with a turnover of about US$7.71 billion to 27 EU countries. In addition, enterprises exporting goods to the EU also carry out self-certification of origin for 6,115 shipments to enjoy preferential tariffs under the EVFTA.

Notably, opportunities are gradually opening up when the global economic "picture" shows many bright spots after a period of decline due to the severe impact of the pandemic.

Deputy Minister of Industry and Trade Dang Hoang An said that, from the EU market, many economic indicators began to recover positively, import demand and commodity consumption tended to increase. EU GDP in the second quarter of 2021 increased by 13.7% over the same period in 2020 and by 2% compared to the previous quarter. The European Commission (EC) forecasts that EU GDP is expected to grow by 4.8% in 2021 and 4.5% in 2022.

“The world is experiencing unprecedented rapid and profound upheaval under the impact of the Covid-19 pandemic. The process of global economic transformation continues to be strongly promoted, requiring Vietnam - a highly open economy – to quickly adapt and actively participate in the restructuring of the new supply chain, becoming an important link in the new global value chain that is being formed," said Deputy Minister Dang Hoang An.

Trade Counselor Tran Ngoc Quan, Vietnam Trade Office in Belgium and the EU, said that the EU economy is in a recovery period, and Vietnam-EU trade relations have many opportunities to further strengthen in the future. Vietnam is one of the few markets that has an FTA with the EU, which is a huge advantage.

“From June 2022, it is forecast that the EU economy will recover to its pre-pandemic level. Thus, the period from now until the end of 2021 and the beginning of 2022 is a golden opportunity to sign contracts for the later period," said Tran Ngoc Quan.

Some economic experts said that, in the context of economic recovery, along with the emergence of new trade and investment trends, the EVFTA will create favorable conditions and competitiveness for Vietnam to participate in new supply chain restructuring with EU partners. At the same time, this is an opportunity for Vietnam to restructure its economy according to new trends, towards a digital economy and a green, environmentally friendly economy, converting to new technologies of higher standards, helping goods have an added advantage in quality, meeting increasingly high technical standards from the EU market.

Requires great efforts from the Government and businesses

In taking advantage of the opportunity to promote trade from the EVFTA, from a local perspective, Phan Thi Thang, Vice Chairman of the Ho Chi Minh City People's Committee, said that the EU is Ho Chi Minh City's third largest export partner (after the United States and China) and is the second largest import partner (after China). In 2020, Ho Chi Minh City's export turnover to the EU will reach US$5.1 billion. This figure in 9 months of 2021 is US$3.5 billion. The EU is the traditional export surplus market of Ho Chi Minh City. However, from the time the agreement came into force until now, the situation of the Covid-19 pandemic has been complicated on a global scale, taking advantage of the incentives from the agreement to enhance import-export activities of Ho Chi Minh City enterprises has not been effective as originally expected.

In the future, in order to strengthen trade and investment cooperation between Ho Chi Minh City and the EU, leaders of the Ho Chi Minh City People's Committee suggested that the Ministry of Industry and Trade coordinate with ministries, central branches and relevant EU agencies to build mechanisms and policies in the direction of simplifying import-export procedures, especially procedures for certification of origin in accordance with practical conditions and the complicated situation of the Covid-19 pandemic, creating favorable conditions for foreign trade partners to promote import-export activities between Vietnam and the EU.

"Besides, the Ministry of Industry and Trade is interested in coordinating with Ho Chi Minh City to organize market research activities and promote the export of Ho Chi Minh City's dominant products to the EU market," said Phan Thi Thang.

Nguyen Trung Kien, Vietnamese Ambassador to Austria, said that people in the EU are increasingly attaching importance to and demanding high food safety and environmental protection. Therefore, in order to make good use of the opportunities from the EVFTA to promote the export of goods to the EU, especially agricultural products and vegetables, it is very important to pay attention to this factor.

“The growing regions in Vietnam such as Bac Ninh, Bac Giang are facing great challenges in food preservation. In Vietnam, the basic trend is still to use a lot of pesticides. The use of non-chemical methods of crop protection and insect control is a long-term issue that needs to be promoted more in the future," said Nguyen Trung Kien.

On a larger scale, Deputy Minister Dang Hoang An said that in order to effectively take advantage of the EVFTA and anticipate new opportunities opened up after the pandemic, it requires great efforts from both the Government and the business community. Vietnam needs to develop appropriate scenarios to flexibly and effectively adapt to the new situation; unleashing all resources for economic recovery and development, ensuring the supply chain; at the same time, actively support and remove difficulties for businesses, stabilize the business investment environment, and not let the economy miss a beat in the trend of world economic recovery.

“Before the opportunities and challenges intertwined in the new normal period, enterprises also need to actively innovate themselves, improve their internal capacity, adjust their production and business strategies accordingly, and quickly adapt to the new normal conditions, deeply participating in the restructuring of global supply chains and values," said the leader of the Ministry of Industry and Trade.

Source: VietNamNews

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