The EU-Vietnam Free Trade Agreement (EVFTA), which is under negotiation, is to pose a number of challenges to staple agricultural and industrial exports of Vietnam.

Experts of the European Trade Policy and Investment Support Project (EU-Mutrap) said agriculture and fisheries are sensitive sectors to both Vietnam and the EU during EVFTA negotiations.

As an array of issues related to jobs, poverty eradication and rural development will be most affected by policy changes in agriculture, both sides, therefore, tend to protect this sector from intense competition once the market is open.

Do Lien Huong, an expert of the EU-Mutrap project, said Vietnam has strength in some farm produce and is able to directly compete with the EU in terms of roasted coffee, tomato, sugar and rice. The country exported considerable volumes of cashew and aquatic products in 2013.

Non-tariff measures and requirements in agriculture imposed by the EU - viewed as the strictest in the world, will also challenge developing countries, including Vietnam, she said.

Regarding the industry sector, EU-Mutrap expert Paul Baker said EVFTA will mostly have impacts on textile and garments, footwear, automobile, high technology, handicrafts and processed wood products.

Vietnamese footwear may benefit much from tax incentives under EVFTA. However, the products will have to face fierce competition from countries with strength in this field such as India, Indonesia, Thailand and possibly the newly-emerging Myanmar.

Meanwhile, Vietnam’s textile and garment industry has to largely depend on imported raw materials, making its products hard to vie with those from other countries.

The same situation is also happening in the wood processing industry. According to Nguyen Minh Thao from the Central Institute for Economic Management, Vietnam imports some 80 percent of timber, which make up 30 – 40 percent of a wood product’s value.

Recently, materials needed for making handicrafts like rattan, bamboo, wood and pottery have also been imported from China, Laos and Cambodia.

High materials cost and shipment charges along with strict requirements set by the EU are also deemed as considerable barriers to the European market for Vietnamese products.-VNA