A yarn factory of the Hue Textile Garment JSC in Thua Thien-Hue province (Photo: VNA) Hanoi (VNA) - Experts have suggestedVietnamese enterprises improve product quality standards to overcome barriersimposed by the fastidious yet promising EU market, thus optimising the advantagesto be generated from the EU-Vietnam Free Trade Agreement (EVFTA).
A resolution ratifying the EVFTA and the EU-VietnamInvestment Protection Agreement sailed through the National Assembly at its ongoingninth session in Hanoi on June 8, with more than 90 percent of delegates votingin approval.
According to Luong Hoang Thai, Head of the Ministry ofIndustry and Trade (MoIT)’s Multilateral Trade Policy Department, Vietnam makesup only 2 percent of imports by the EU - the world’s second largest importer - dueto the competition with other economies.
Vietnam has been enjoying trade preferences offeredunilaterally by the EU under the General Scheme of Preferences (GSP), but only42 percent of tariff lines are zero.
With the EU’s strong commitment to market opening andeliminating close to 100 percent of tariff lines, the EVFTA is expected to growVietnam’s exports to the bloc by about 42.7 percent in 2025 and 44.37 percentin 2030.
Vietnam’s total export value is projected to increase bybetween 5.21 and 8.17 percent in the first five years of implementation, 11.12 and15.27 percent in the following five years, and 17.98 to 21.95 percent in the subsequentfive years.
Apart from exports, Vietnamese imports will also benefitfrom the agreement, with products and materials of high quality and reasonableprices, especially machinery, equipment, and technologies, entering the country.
Once effective, the EVFTA will help recover Vietnam’s economyand raise GDP by 2.18 to 3.25 percent in the 2019-2023 period, 4.57 to 5.3percent in 2024-2028, and 7.07 to 7.72 percent in 2029-2033, according to Ministerof Industry and Trade Tran Tuan Anh.
Worth noting is that the deal promises new valuechains for both sides and a more open and favourable investment environment in Vietnam,helping it attract more EU investment, particularly in services, finance, automobiles,processing and manufacturing, IT, hi-tech, and agricultural processing.
Nicolas Audier, Chairman of the European Chamber ofCommerce in Vietnam (EuroCham), said the EVFTA has opened up a new chapter in investmentand trade ties between the two sides.
Vietnamese commercial affairs offices in the EU,Belgium, and Luxembourg have recommended Vietnamese exporters review theirproduction and stockpiling capacity to meet orders from the bloc.
To benefit from tax incentives under the EVFTA,materials must originate from the EU or Vietnam at fixed ratios, which is a majorchallenge for Vietnamese firms whose materials are primarily imported fromChina or ASEAN.
Moreover, the EU has set high requirements on productquality, food hygiene, packaging, and the environment, experts said, encouragingVietnamese enterprises to make every effort to improve product quality.
They also pointed to trade remedies the EU may impose onVietnamese goods.
Local companies should therefore change their mindsetand use the pressure of competition as momentum to renovate and develop andadapt to changes in the business environment following international economicintegration, Minister Anh said./.
VNA
