EVFTA opportunities for Vietnamese fruit and vegetable products
Vietnam is known as a country with many advantages in the production and export of tropical, subtropical and temperate vegetables and fruits. Currently, Vietnam has about 120 types of vegetables and hundreds of types of fruits. Thanks to advances in science and technology, more and more out-of-season vegetables and fruits of Vietnam are grown and harvested, not only meeting the needs of domestic consumption but also serving for export. According to the General Department of Vietnam Customs, Vietnam's fruit and vegetable exports had a strong increase in the 2010-2020 period, from USD 460 million in 2010 to USD 3.27 billion in 2020, with the average growth rate for this period of 30.1%.
Meanwhile, Germany is a country with large and stable demand for fruit and vegetable products, and increasingly prefers tropical fruit and vegetable products. Germany has a year-round import demand and its imports are increasing as German consumers tend to shift to trying and consuming exotic fruits and vegetables from non-EU regions. According to Statista.com, in 2020, Germany imported about 126,000 tons of pineapple and more than 98 thousand tons of mango and guava.
Although Vietnam's vegetables and fruits exported to Germany are not much, the export turnover has grown well over the years. According to the General Department of Vietnam Customs, Vietnam's fruit and vegetable exports to Germany increased from USD 5.8 million in 2010 to USD 19.9 million in 2020 with the average growth rate of this period being 12.8%/year. Some of Vietnam's fresh fruit and vegetable products that are favored by EU people as well as German consumers are: mango, pineapple, dragon fruit, passion fruit, rambutan... With certain advantages and benefits from implementation of the EVFTA, Vietnam's fruit and vegetable exports to Germany are expected to grow more in the future.
The benefits that EVFTA brings to Vietnam's fruit and vegetable industry include:
Benefit from tariff reduction
Vegetables and fruits are one of the product groups that the EU/Germany still maintains relatively high MFN and GSP tariffs. The average MFN and GSP tariff rates applied by the EU to Vietnam's vegetables and fruits are 13.17% and 9.33%, respectively. In the EVFTA, the EU had a relatively high level of commitment to eliminate tariffs on fruit and vegetable products from Vietnam, specifically:
- Eliminate tariffs on 514/547 fruit and vegetable tariff lines (equivalent to 94%) at entry into force;
- Eliminate ad valorem tariff at entry into force, but still keep the absolute tariff for 24/547 tariff lines (equivalent to 4%);
- Reduce tariff gradually to 75 EUR/ton from 2025 onwards (for Bananas, excluding leaf bananas, fresh (HS code 08039010);
- Apply tariff quotas on 03 products (8/547 tariff lines) including garlic, sweet corn, mushrooms, with the tariff rate in the quota of 0%.
Benefits from protection of Geographical Indication
Of the 39 geographical indications of Vietnam that are automatically protected under the EVFTA, 20 are of fruits and nuts, including:
1. Doan Hung - Pomelo
2. Binh Thuan - Dragon fruit
3. Thanh Ha - Lychee
4. Vinh - Orange
5. Luc Ngan - Lychee
6. Hoa Loc - Mango
7. Dai Hoang - Banana
8. Bac Kan - Seedless persimmon
9. Phuc Trach - Pomelo
10. Trung Khanh - Chestnut
11. Ba Den - Custard apple
12. Ninh Thuan - Grapes
13. Tan Trieu - Pomelo
14. Bao Lam - Seedless persimmon
15. Bac Kan - Mandarin
16. Yen Chau - Mango
17. Binh Minh - Pomelo
18. Luan Van - Pomelo
19. Vinh Kim - Star apple
20. Cao Phong - Orange
Vietnamese fruit and vegetable products protected by geographical indications will have the opportunity to increase their value and brand when approaching the German market..
EVFTA full text for more information: https://wtocenter.vn/chuyen-de/12778-eu-vietnam-trade-and-investment-agreements
Source: "Business Handbook: Exploiting the EVFTA to import and export goods between Vietnam and Germany" - Center for WTO and International Trade
