Utilizing vao w88 EVFTA in Vietnam’s fishery exports to vao w88 EU market

ABSTRACT:

Vietnam is one of vao w88 biggest fishery suppliers for vao w88 European Union. Especially, vao w88 EU-Vietnam Free Trade Agreement (EVFTA) which came into effect on August 1, 2020 is expected to significantly strengthen vao w88 competitiveness of Vietnam’s fishery products in vao w88 EU market. Hence, it is essential for Vietnamese businesses to take advantage of opportunities brought by vao w88 EVFTA to boost their fishery exports to vao w88 EU in vao w88 coming time.

Keywords: EVFTA, fishery export, competitiveness.

1. Preferential import tariffs for Vietnam’s fishery products in vao w88 EVFTA agreement

vao w88 EVFTA commits to give many preferential import tariffs for Vietnam’s seafood products, with vao w88 roadmap shown in vao w88 Table. In particular, vao w88 tariffs on most raw shrimp (fresh, frozen, chilled) to vao w88 EU will be reduced from base rate of 12-20% to 0% right after EVFTA taking effect; processed shrimp products will have a seven-year tariff reduction road map while primary competitors such as Thailand, India, Indonesia and Ecuador have current rate respectively of 12%, 4,2%, 4,2% and 12% because of without FTA.

Moreover, there will be nearly 50% of vao w88 tariff lines of vao w88 most product with high tax rate of 6-22% (such as oyster, scallop, squid, octopus, clam, processed abalone, frozen tiger shrimp, etc.) will be reduced to 0%; about 50% of vao w88 remaining tariff lines with vao w88 base tax rate of 5,5-26% (such as shrimp, catfish, tuna products, etc.) will be reduced to 0% after 3-7 years. Particularly, canned tuna and surimi (fish ball) applies tariff quotas are 11,500 tons per year and 500 tons per year, respectively.

Table: Tariff reduction roadmap in EVFTA

for some primary products of Vietnam

Source: Vietnam Ministry of Industry and Trade (2020)

In order to benefit from tariff preferences under vao w88 EVFTA, vao w88 products must be qualified asoriginating products. Criteria of origin in EVFTA is pure origin: those were born and raised within territory of an EU Member State or Vietnam.

Thus, Vietnam can access a huge seafood consumption market with 27 member states (vao w88 UK left vao w88 EU on 31st January 2020), a population of over 500 million people, a total GDP of over 15,000 billion USD, accounting for about 22% of vao w88 world’s GDP, vao w88 EU will be a big and potential market. Moreover, vao w88 average income per capita of vao w88 EU members is quite high in comparison to vao w88 world, and they prefer to useseafood productsfor food and health purposes, due to vao w88 superiority of this type of product: delicious and tonic. According to vao w88 statistics from vao w88 International Trade Center (ITC), in 2019, vao w88 EU imported 55.66 billion USD. Vietnam ranked 6^thamong vao w88 foreign markets supplying seafood to 28 countries (including vao w88 UK) of vao w88 EU, accounting for 2.45% of vao w88 EU’s total seafood imports in 2019. In ASEAN region, Vietnam is vao w88 largest supplier market to vao w88 EU, in vao w88 Asia, Vietnam is second only to china (Figure 1). Therefore, vao w88 elimination of tariffs on most of Vietnam’s products exporting to vao w88 EU, including seafood, will create an important advantage for Vietnam in competing with other competitors in vao w88 EU market. EVFTA is expected to help Vietnam’s seafood exports to grow by about 2% in vao w88 period 2020-2040

Figure 1. vao w88 main seafood suppliers to EU-28 in 2019

Source: Vietnam Ministry of Industry and Trade (2020)

2. Someresults since vao w88 EVFTA comes into force

vao w88 general report of vao w88 Ministry of Industry and Trade recorded that vao w88 number of Vietnamese seafood exporters to vao w88 EU market increased sharply after vao w88 EVFTA took effect. Particularly, before August 1, 2020, vao w88 number of businesses participating in seafood export to vao w88 EU is 370. In which, vao w88 number of enterprises participating in seafood export to vao w88 EU every month is about under 200 enterprises per month. But after that, vao w88 number of enterprises participating in seafood export to vao w88 EU has increased to over 200 enterprises per month. Preliminary estimated in 2020, there are 409 Vietnamese enterprises exporting seafood to vao w88 EU. Most of these businesses are reputable and have good supply capacity (vao w88 Hoang, 2021).

According to data from vao w88 General Department of Customs, Vietnam's seafood export to vao w88 EU increased immediately after vao w88 EVFTA took effect (Figure 2). However, in November and December 2020, output decreased slightly compared to vao w88 same period in 2019. vao w88 main reason was that EU seafood importers actively reduced vao w88 amount of seafood imported for vao w88 holiday because of being afraid of vao w88 negative impact ofCovid-19. Besides, reducing seafood inventory was also a solution to cut costs. This resulted in a decrease in Vietnam's seafood exports to vao w88 EU. In addition, vao w88 reason also came from vao w88 Vietnamese side when vao w88 seafood production eligible for export to vao w88 EU during this period was not high because of vao w88 impact of vao w88 storms.

Figure 2. Vietnam’s seafood export to vao w88 EU in period 2019-2020

 In 2020, despite vao w88 positive impacts from EVFTA has come into effect, seafood export to vao w88 EU still decreased by 8.8% in volume and 6.21% in value compared to 2019, estimated at 205.9. thousand tons with vao w88 value of 947.89 million USD, accounting for 10.18% of vao w88 volume and accounting for 11.29% of vao w88 seafood export value of Vietnam. vao w88 UK's withdrawal from vao w88 EU in 2020 also made vao w88 EU market no longer in vao w88 group of markets with seafood export value of over 1 billion USD in 2020.

Vietnam's seafood products exported to vao w88 EU are quite diversified and items creating vao w88 biggest foreign currency value are shrimp worth over 500 million USD; tuna species worth 128 million USD; shutchi catfish and yellowtail catfish worth 123 million USD, clam species worth 55 million USD; frozen fish worth 39.4 million USD; squid species worth 31.8 million USD and surimi worth nearly 10 million USD respectively.

Export statistics show that when EVFTA comes into effect, shrimp, clam, tuna and squid are vao w88 items that have benefited most from EVFTA's tariff preferences.

3. Challenges

However, it is also not easy to take advantages from vao w88 EVFTA. Fishery is a manufacturing industry which heavily depends on nature. Vietnam is currently ranked 3rd in vao w88 world in aquaculture production after China and India, but vao w88 impact of climate change, drought, saltwater intrusion, marine environmental incidents ... makes vao w88 harvest not as expected, vao w88 output is not enough to meet vao w88 processing capacity. vao w88 scale of Vietnamese enterprises is small while capital is limited, management skills are not high enough, still being confused in market access and there is no propaganda and promotion strategy.

Moreover, vao w88 proportion of raw products of vao w88 enterprise is still high, enterprises pay little attention to building and protecting product brands, sometimes even have to "wear" foreign brands, pity to sell products at a loss, and difficult to compete in vao w88 EU market.

On vao w88 other hand, in order to enjoy tariff and non-tariff preferences in Vietnam-EU trade, Vietnamese products must meet vao w88 rules of origin that raw materials for vao w88 production must be cultivated and harvested within Vietnam’s terriroty. Because domestic raw materials only provide about 40-45% of vao w88 processing capacity; up to billions of USD of seafood raw materials are imported annually while vao w88 domestic material supply system is idyllic, scattered and difficult to trace vao w88 origin, making quality control inherently difficult, and therefore, more difficult to meet vao w88 above requirement.

Some of vao w88 EU's measures even have higher standards than vao w88 WTO agreements. In addition to vao w88 EU SPS regulations, Viet Nam’s businesses also need to meet vao w88 specific regulations of large retailers and wholesalers.

Meanwhile, according to enterprises’ feedbacks, vao w88 application of commitments in EVFTA in exporting seafood to vao w88 EU market still faces many difficulties, especially vao w88 implementation of documentary and certification regulations still makes confusion. Specifically:

- C/O form Eur1: Confused at applying in vao w88 business community and within vao w88 EU member states themselves.

- C/O: Take long time to be issued because it relates to vao w88 certification under vao w88 IUU regulation.

- vao w88 application of HS codes is also difficult since enterprises are confused at declaring which code and which code under vao w88 agreement is not accepted by vao w88 importing country.

4. Somesuggested solutions

In order to take advantage of opportunities from EVFTA and boost Vietnam's seafood exports to vao w88 EU market, it is necessary to pay attention to implementing some of these following solutions:

4.1. For vao w88 Government of Vietnam

- Promote vao w88 establishment of national standards, regulations, brands and trademarks. Develop and replicate vao w88 issuance of production area codes, traceability to meet vao w88 competitiveness in vao w88 trend of international integration. Along with that, it is necessary to promote vao w88 simplification and modernization of issuing certificate of origin (C/O).

- Strengthen vao w88 management and inspection to ensure vao w88 sanitary and epidemiological quality of exported aquatic products.

- vao w88 authorities need to continuously organize seminars, issue guidance, and disseminate knowledge and scientific information about fishing and aquaculture on mass media to improve vao w88 seafood exporters’ awareness of non-tariff trade barriers of vao w88 EU and his member countries.

4.2. For Vietnamese enterprises

- In order to further improve vao w88 competitiveness of seafood exports and create an increasingly solid position for Vietnamese seafood products in vao w88 EU market, enterprises need to make efforts to proactively research vao w88 market and vao w88 laws, especially changes in EU regulations, to fully and accurately access information. Failure to update information regularly will cause businesses to fall into a passive position and face high risks.

- Develop new products based on research results of consumer tastes, especially housewives; factors related to human health; market capacity;  control of food quality, hygiene and safety according to technical standards, take advantage of vao w88 traditional retail system, information and communication system; brand building and protection; update vao w88 EU information on vao w88 relating fields, in vao w88 media, at all opportunities; connect to EU businesses.

- In vao w88 context of vao w88 Covid-19 pandemic, vao w88 trend of seafood consumption and import in vao w88 EU has changed. Consumers refer to seafood products for home consumption which are easy to store, to process, convenient and with low average prices. These criteria are suitable for frozen, canned, dried and processed fish products such as fish ball; frozen shutchi catfish; frozen small to medium sized shrimp and black tiger shrimp. Vietnamese enterprises need to pay attention to vao w88 production and processing of these products.

- Enterprises need to know and understand thoroughly vao w88 rules of product origin; coordinate well with vao w88 seafood growers and fishermen in compliance with vao w88 rules of origin.

- Prepare conditions for overcoming anti-dumping, anti-subsidy and trade safeguard measures. In addition to vao w88 SPS and TBT requirements, vao w88 EU market is still able to continue applying trade remedies such as anti-dumping and anti-subsidy.

- Satisfy food hygiene and safety requirements right at vao w88 production facility (includes ensuring facilities and production processes according to HACCP standards). In addition, seafood processors and exporters need to understand some of vao w88 EU’s general regulations on hygiene rules for foods of animal origin, on allowed residues of certain substances in fishery products.

- Organize production in a closed chain with quality control; cut down on intermediaries; not scramble to buy domestically and to export raw products.

REFERENCES:

1. Vietnam Ministry of Industry and Trade. (2020).Export information to vao w88 EU market - Fisheries industry. Hanoi: Industry and Trade Publishing House.
2. Vietnam General Department of Customs. (2021).Vietnam's merchandise import and export landscape in December 2020 and whole year 2020. Hanoi: Vietnam General Department of Customs.
3. Vietnam Association of Seafood Exporters and Producers (VASEP). (2019).Seafood market report in Europe in 2019.Ho Chi Minh City: VASEP.
4. European-American Market Department, Vietnam Industry and Trade Information Center, Vietnam Ministry of Industry and Trade. (2020).Vietnam - EU Trade Specialist: Utilizing commitments in EVFTA Agreement has recorded initial successes. Hanoi: Vietnam Industry and Trade Information Center.
5. vao w88 Hoang (2021). vao w88 number of seafood exporters to vao w88 EU increased sharply since EVFTA. Retrieved from: https://baodautu.vn/so-luong-dn-xuat-khau-thuy-san-sang-eu-tang-manh-khi-co-evfta -d138818.html

TẬN DỤNG HIỆP ĐỊNHEVFTA TRONG XUẤT KHẨU THỦY SẢN VIỆT NAM SANG THỊ TRƯỜNG EU

NGUYỄN THỊ HOÀI THU

Học viện Chính trị Công an Nhân dân

TÓM TẮT:

Việt Nam là một trong những đối tác cung cấp thủy sản lớn nhất cho khu vực EU. Đặc biệt, sau khi Hiệp định Thương mại tự do Việt Nam - EU (EVFTA) có hiệu lực, tính cạnh tranh của các sản phẩm thủy sản Việt Nam tại thị trường này sẽ tăng lên. Do đó, các doanh nghiệp Việt Nam cần tận dụng cơ hội từ Hiệp định EVFTA để đẩy mạnh xuất khẩu thủy sản vào thị trường EU trong thời gian tới.

Từ khóa: EVFTA, xuất khẩu thủy hải sản, năng lực cạnh tranh.

[Tạp chí Công Thương - Các kết quả nghiên cứu khoa học và ứng dụng công nghệ,

Số 10, tháng 5 năm 2021]