The significance of the study
The EVFTA Agreement, which came into effect on August 1, 2020, marks Vietnam's decade-long commitment to fostering trade relations with the EU This comprehensive and high-quality agreement is designed to balance the interests of both parties while adhering to World Trade Organization (WTO) standards With strong market-opening commitments, the EVFTA is projected to boost Vietnam's GDP by an average of 2.18-3.25% from 2019 to 2023, 4.57-5.30% from 2024 to 2028, and 7.07-7.72% from 2029 to 2033 Additionally, it is expected to enhance Vietnam's export turnover to the EU, with an anticipated increase of approximately 20% by 2020, 42.7% by 2025, and 44.37% by 2030.
By 2030, the commitment to eliminate nearly 100% of import tariffs under the agreement presents significant opportunities for Vietnamese exports, particularly in the fisheries sector As a key industry in Vietnam, fisheries not only contribute substantially to the national economy but also represent a promising export product for the European market.
In the past time, there have been a number of research projects on EVFTA such as:
The article examines the impact of the EU-Vietnam Free Trade Agreement (EVFTA) on Vietnam's textile, garment, and footwear industries during the first quarter of 2021 It highlights how these sectors are expected to experience growth due to the agreement, particularly in light of the recovery of Vietnam's exports to the EU market The implementation of the EVFTA coincided with the challenges posed by the Covid-19 pandemic, which significantly affected consumer demand for non-essential goods, including imported textiles and footwear Despite these challenges, the EVFTA has played a crucial role in revitalizing exports in these industries during the latter part of 2020 and the early months of 2021 Additionally, the article provides an overview of the Vietnam-EU trade situation, including policy updates and market insights, supported by reliable data and assessments of other key export items such as wood products and agricultural goods.
In the first quarter of 2021, the EU Trade report and the Business Manual "EVFTA and Vietnam's Fruit and Vegetable Industry" provide a comprehensive overview of the EVFTA commitments impacting the sector This document analyzes the opportunities and challenges presented by these commitments, offering targeted recommendations for Vietnamese enterprises in the fruit and vegetable industry to enhance their competitiveness in the EU market.
While previous studies have evaluated the effects of the EVFTA on various Vietnamese export sectors, there has yet to be a comprehensive analysis focused on its impact on Vietnam's seafood exports This gap in research prompted the author to conduct an in-depth examination of this specific area.
Research purpose and tasks
Target
The project is implemented to research impact and propose solutions to helpVietnam's seafood export industry make effective use of the commitments of theEVFTA.
Mission
To achieve the above objectives, the topic focuses on solving 3 main tasks:
- Clarifying trade relations between Vietnam and EU from 1995 to present.
- Analyze the impact of the EVFTA on Vietnam's seafood exports to the EU.
- Proposing recommendations and solutions to promote Vietnam's seafood industry in the context of joining EVFTA
Research scope
Time
Actual data of the seafood industry for analysis related to the impact of theEVFTA Agreement will be carried out when the Agreement comes into force
Space
Impact of the EVFTA Agreement on Vietnam's seafood exports to the EU.
The methodology
The article applies scientific research methods including: statistical methods, data collection, analysis and synthesis methods, qualitative methods.
The statistical method of data collection is essential for synthesizing economic data from various countries, ensuring accurate results This approach involves gathering secondary data from diverse sources, including books, newspapers, specialized magazines, scientific conference proceedings, research institution reports, and information from the websites of enterprises, ministries, and both domestic and foreign press agencies.
The statistical analysis and synthesis method highlights both the advantages and disadvantages of the EVFTA Agreement's impact on Vietnam's seafood industry This approach leads to informed conclusions and predictions, ultimately recommending solutions to enhance the supply chain within the textile sector in Vietnam.
Qualitative research methods involve consulting experts and conducting discussions and interviews with professionals in relevant fields, including researchers, managers from the Ministry of Planning and Investment, and faculty members from the Academy of Policy and Development.
Structure of thesis
The structure consists of 3 chapters:
Chapter 1: Overview of Vietnam-EU trade relations from 1995 to present Chapter 2: Impact of the EVFTA on some groups of Vietnamese exports to the EU
Chapter 3: Some recommendations and solutions to improve the efficiency of taking advantage of commitments from EVFTA
OVERVIEW OF EU-VIETNAM TRADE ECONOMIC AND
Overview of EU-Vietnam economic and trade relations
The European Union (EU) was born in a rather special situation, it was a
"ruined" Western Europe after World War II (1954) in which the warring country was the largest country (Germany) Therefore, the main goal of the founders of the
The European Union was established to foster peace among European nations, reduce hostilities between Germany and France, strengthen ties among member countries, and prevent conflicts within Europe.
Over the past 60 years, the European Union (EU) has significantly expanded from its original six founding members to 28 countries, showcasing remarkable achievements in integration The bloc has perfected its economic integration across five key forms: free trade area, customs union, common market, monetary union, and economic union Additionally, the EU has made substantial progress in institutional reform, policy-making, foreign policy consolidation, and enhancing its security authority.
The European Union (EU) stands as the most successful association organization globally, evolving from economic ties to socio-political connections through supranational institutions that respect the autonomy of its member states Currently, the EU's socio-economic development is characterized by a strong emphasis on integration, collaboration, and the promotion of shared values among its diverse nations.
The European Union covers an area of 4.48 million km², representing 3.38% of the global landmass Notably, there is a significant disparity in land sizes among member countries, with France being the largest at 1,753 times the size of Malta, the smallest EU nation.
Economic: Currently, the EU is the largest economic union in the world In
In 2019, the European Union's GDP at current exchange rates was 15,593 billion USD, representing around 20% of global GDP However, there is a significant income disparity among member countries, with EU15 nations like Germany, the UK, and France exhibiting much higher GDP levels compared to newer member states, primarily former Eastern European countries, which experience a relatively lower standard of living.
Population: In 2020, the population of the EU is expected to reach 448 million people However, the population size of the countries is also quite high.
In 2019, the European Union's GDP per capita was $37,642, highlighting significant disparities in income levels among member countries This variation reflects the diverse economic landscape of the EU market.
The European Union (EU) is a key trade partner for Vietnam, consistently accounting for a significant portion of the country's exports in recent years Since the establishment of diplomatic relations in 1990, Vietnam-EU trade cooperation has rapidly evolved, particularly from 2000 onwards As we celebrated 30 years of diplomatic ties in 2020, the partnership has weathered global fluctuations while achieving critical milestones that enhance Vietnam's international integration The successes of this cooperation lay the groundwork for a promising new chapter in bilateral relations.
In 2019, two-way trade between Vietnam and the EU reached an impressive 49.8 billion USD, with Vietnam exporting 35.8 billion USD, capturing a 1.8% market share and ranking 11th among the largest exporting countries to the EU Key export sectors expected to benefit from this trade relationship include textiles, footwear, agro-forestry-fishery products, and plastic products.
The EU-27 stands as one of Vietnam's largest export markets, ranking third after the United States and China In the global context, Vietnam is recognized as the 17th largest trading partner for the EU-27, while it holds the 8th position among Asian partners and is the second largest partner within the ASEAN region.
The European Union, comprising 27 member countries, presents a diverse market with unique consumption characteristics Despite differing customs and consumption patterns, these nations share economic and cultural similarities, particularly in Western and Northern Europe The socio-economic development levels across the EU are relatively uniform, leading to common preferences and consumption habits among consumers To succeed in this market, imported goods must meet stringent standards of quality, origin, and design, ensuring high hygiene and safety European consumers tend to favor globally recognized brands, associating them with superior quality and reliability, which provides them with peace of mind regarding their purchases.
The EU market is a picky market; European people always select carefully.
EU importers and consumers maintain high standards for imported goods, often exhibiting more caution compared to key markets like the United States, ASEAN, and China The EU's import management policies enforce stringent technical standards regarding food hygiene and safety, as well as regulations for animal and plant quarantine, good agricultural practices, and organic labeling, all aimed at safeguarding consumers and the environment.
The European Union (EU) prioritizes consumer protection by emphasizing safety and health standards in its market To ensure product safety, the EU conducts inspections at production sites and maintains an alert system among member countries for hazardous products, eliminating the need for border inspections It enforces strict regulations that prohibit the trade of goods from countries that do not meet European safety standards Additionally, the EU mandates rigorous labeling requirements for food, beverages, pharmaceuticals, and silk fabrics, detailing ingredients and preservation methods Violations such as improper packaging, smuggling, and copyright infringement are met with strict penalties, underscoring the EU's commitment to consumer safety.
Despite the growing value of imports from non-EU countries, the EU remains a significant and promising market However, entering and establishing a presence in this market is challenging due to intense competition from a multitude of global producers and exporters who are increasingly targeting this lucrative opportunity.
1.1.2 Overview of the cooperation relationship between Vietnam and the EU
Vietnam and the European Union (EU) established diplomatic relations on November 28, 1990, marking the beginning of a rapidly evolving partnership Since then, the EU has emerged as a key partner for Vietnam, significantly impacting various sectors, particularly in economy, trade, and investment This collaboration has played a vital role in Vietnam's socio-economic development and its integration into the global economy.
Since the establishment of diplomatic relations, Vietnam and the European Union have experienced significant growth in their partnership, necessitating a new cooperation framework to replace the 1995 Vietnam-EC Framework Agreement In June 2005, the Prime Minister of Vietnam approved a Master Plan to guide Vietnam-EU relations through 2010 and set orientations for 2015, focusing on the development of collaborative policies.
IMPACT OF THE EVFFTA ON SOME GROUP OF
Overview of the EVFTA Agreement
In October 2010, Vietnam's Prime Minister and the President of the European Union (EU) initiated negotiations for a Free Trade Agreement (EVFTA) following the successful completion of technical preparations by both parties.
On June 26, 2012, Vietnam and the EU officially commenced negotiations for the EVFTA Agreement, following guidance from their leaders After nearly three years of discussions, which included 14 official sessions and multiple ministerial meetings, both parties reached an agreement in principle on the core elements of the Agreement The EVFTA was officially signed on June 30, 2019, and came into effect on August 1, 2020.
2.1.2 The main comitments of EVFTA
The EVFTA, alongside the CPTPP, represents a new-generation agreement characterized by extensive and high-level commitments This Agreement is structured into 17 chapters and includes 2 protocols, focusing on key areas of commitment that enhance trade and economic cooperation.
Exporting goods between two sides
+ general terms (called written commitments); and
+ specific tariff schedules (called market access commitments)
+ Determining common rules of origin
+ specific rules of origin for certain goods
The Sanitary and Phytosanitary Measures (SPS)
The Technical Barriers to Trade (TBT)
Trade in services (the text is related to general regulations and commitments to open markets)
+ General provisions (called written commitments); and
+ Specific tariff scheduled on opening service market (called market access commitments)
+ General principles of investor treatment
+ Dispute settlement mechanism between the State and foreign investors
Trade and Sustainable Development (including environment, labor),
Below is a summary of the key issues in EVFTA:
1.1 Commitment to open the EU commodity market
With the implementation of the Agreement, the EU will remove import taxes on approximately 85.6% of tariff lines, accounting for 70.3% of Vietnam's export turnover to the EU After seven years, this will increase to a total elimination of import taxes on 99.2% of tariff lines, representing 99.7% of Vietnam's export turnover Additionally, for the remaining 0.3% of export turnover, the EU has committed to providing Vietnam with a tariff quota that includes an import tax of 0% within the quota.
Almost all of Vietnam's exports to the EU will be eliminated under a short-term roadmap, marking the highest level of commitment received from partners in signed FTAs This advantage is particularly significant as the EU remains one of Vietnam's two largest export markets today.
Table 2.1 - Summary of EU open-door commitments for some important
Group of Agricultural - Aquatic products
(except for canned tuna and fish balls)
Fresh and processed fruit and vegetable products, fruit juices, fresh flowersOther agricultural products
Ethyl alcohol: 1,000 tons Other chemical products (mannitol, sorbitol, dextrins, ): 2,000 tons
Computers, electronic products and components
A schedule of 3-7 years will be applied for import duties of the remainder
Source: Ministry of Industry and Trade 1.2 Commitment to opening the goods market of Vietnam
Vietnam is set to eliminate tariffs on 48.5% of tariff lines, representing 64.5% of import turnover from the EU, as soon as the Agreement comes into effect Within seven years, this will increase to 91.8% of tariff lines, covering 97.1% of EU export turnover After ten years, approximately 98.3% of tariff lines will be eliminated, accounting for 99.8% of import turnover For the remaining 1.7% of EU tariff lines, Vietnam will implement a long-term roadmap for tariff elimination over more than ten years or utilize tariff quotas in line with WTO commitments.
Table 2.2: Summary of Vietnam’s market access commitments to some important EU commodity groups
Whole cars and components, spare parts for cars and motorcycles
A car is over 2500 cm3 for diesel and over 3000 cm3 for gasoline cars will reduced 0% in the 9 th year
For the remaining cars, it will follow a 10-year tariff reduction commitment
Chemical substances and products the chemical substances
Textile, leather and footwear raw materials
For any kind of export tariffs or fees except for cases which are clearly reserved (according to the commitment results, only Vietnam has reservations on this issue, the
EU does not make any reservations), two sides will not apply the tariff
Under this agreement, Vietnam and the EU will eliminate tariffs and fees on exports, excluding goods with reservations from Vietnam Additionally, no tariffs or fees will be imposed on exports that exceed those applied to domestic goods.
In Annex 2d Chapter 2 of EVFTA, it has some terms about the reservation of Vietnam, applicable to goods exported from Vietnam to the EU with the following main contents:
Vietnam is set to implement export tariffs on various products including sand, shale, granite, certain ores and concentrates, crude oil, coal, coke, and gold Over the next five years, existing tariff lines with high export duties will be adjusted to a maximum of 20%, while manganese ore will see a reduction to 10% All other products will retain their current export duties.
- Vietnam will eliminate export tariff for all other products according to a maximum 15- year schedule.
1.4 Commitment on non-tarrif barriers
Technical barriers to trade (TBT):
Vietnam and another country have pledged to strengthen the application of the WTO's Technical Barriers to Trade Agreement (TBT Agreement), with Vietnam specifically committing to improve the adoption of international standards in the development of TBT regulations.
Vietnam has committed to recognizing all technical conformity certifications for EU cars under the principles of the 1958 UNECE Agreement, as outlined in the separate Annex addressing non-tariff barriers in the automotive sector, five years after the EVFTA takes effect.
Vietnam commits to accept the label “Made in EU” for non-agricutural products (except for pharmaceuticals) while still accepting specific lales of orgin from a specific EU country.
Sanitary and Phytosanitary Measures (SPS):
Vietnam and the European Union (EU) have established an agreement facilitating exports to Vietnam The management of this agreement is handled by the competent authorities of each specific EU member country involved in the import or export of Vietnamese goods, rather than a centralized joint body.
The European Commission oversees the coordination and inspection of control systems and legal frameworks across EU member states, ensuring consistent application of technical standards and regulations throughout the entire European market.
The Agreement also includes commitments towards reducing other tariff barriers (eg: commitments on export/import licensing, customs procedires ) to facilitate import and export activities between the two Parties.
The Agreement includes a specific Annex on pharmaceuticals, which are significant EU export products representing 9% of total imports from the EU and Vietnam Both parties have committed to various measures to enhance pharmaceuticals trade between them Vietnam agrees to permit foreign-invested enterprises to import pharmaceuticals, though they will not engage in wholesale or retail sales, and can only resell Vietnam’s pharmaceutical products to licensed wholesalers Additionally, Vietnam has committed to allowing EU contractors to participate in pharmaceutical bidding packages, subject to certain reservations.
2 Trade in Service and Investment
Vietnam and the EU are dedicated to fostering an open and favorable investment environment for businesses from both regions Vietnam's commitments exceed those made in the WTO, while the EU's commitments surpass WTO standards, aligning with the highest levels established in recent EU free trade agreements.
Vietnam has opened several sectors to EU investors, including professional services, financial services, telecommunications, transportation, and distribution Both parties have committed to ensuring national treatment in investment and have engaged in discussions regarding dispute resolution between investors and the state.
Box 2.1: A number of EVFTA commitments to open service trading and investments from Vietnam to the EU Service:
Open-door commitments: In the Agreemtn, Vietnam promises to open more access to EU service suppliers than in WTO in the following areas:
For financial, telecommunications, sea freight and postal services, Vietnam also commits to a series of binding rules
These products below will be commited to open for EU by Vietnam, such as
Solution
3.2.1 Group of solutions for authorities related to the fisheries industry
Firstly, in order to increase competitive advantage, it is necessary to focus on improving product quality, specifically, agencies need to:
To enhance access to capital for businesses in the aquaculture industry, it is essential to establish a preferential interest rate and implement favorable policies for infrastructure development and the import of machinery and technology This approach will facilitate the continuous modernization of production lines and warehouses, while also promoting the establishment of an efficient logistics system that ensures seamless delivery from production to consumers.
(ii) EU enterprises all have modern and environmentally friendly production technology, so it is necessary to have incentives for these enterprises to invest in Vietnam.
(iii) Organize training sessions for businesses to improve their skills and know how to apply advanced technology
(iv) Researching and testing new varieties is a must, in order to find products with good quality
(v) It is necessary to focus on important certifications to avoid confusion; the government needs to study to integrate between certification systems.
Secondly, to completely solve the IUU yellow card problem:
Vietnam is currently facing a yellow tag from the EU due to illegal, undeclared, and unregulated fishing practices To address this issue, the country must strike a balance between developing its fisheries policy and preventing the overexploitation of marine resources, while also safeguarding the livelihoods of fishermen This includes implementing strict management measures for fishing activities and putting an end to Vietnamese vessels illegally operating in foreign waters.
The Government, along with relevant ministries and local authorities, has implemented the 2017 Fisheries Law to establish the "yellow card" system, aligning with international standards to promote sustainable development Additionally, they are providing guidance to localities to enhance the management of Illegal, Unreported, and Unregulated (IUU) fishing practices.
In addition, to fix the yellow card, it is necessary to take some of the following measures:
(i) Building logistics facilities and seafood processing industrial zones, supporting fishermen to switch to aquaculture and operate in a controlled manner
Supporting fishermen through the integration of aquaculture alongside traditional fishing practices can significantly reduce reliance on conventional methods and alleviate pressure on natural fishery resources This approach not only promotes sustainability but also ensures a consistent supply of raw materials for seafood processing activities.
(iii) Promulgating and implementing a system of laws and policies on strengthening the effective implementation of regulations in line with European recommendations and management practices in Vietnam.
To combat illegal, unreported, and unregulated (IUU) fishing, Vietnam has joined the Agreement on the Implementation of the United Nations Convention on the Law of the Sea (UNCLOS) 1982, enabling it to adopt timely preventive measures In addressing the yellow card issue, Vietnam is also exploring additional agreements that promote adherence to international maritime regulations and aims to establish anti-IUU partnerships with neighboring countries.
Establishing a strong and reputable association among domestic businesses remains a challenge It requires not only the initiative from enterprises but also active involvement from authorities to facilitate connections and foster collaboration Additionally, creating an environment conducive to resolving conflicts during the cooperation process is essential for success.
3.2.2 Group of solutions for farming, mining, collecting, processing, exporting enterprises and fishermen
The integration of advanced technology in machinery factories and the enhancement of infrastructure are crucial for establishing technical barriers in the industry Additionally, regular quality inspections and supervision processes are essential for sea processing enterprises The adoption of standards such as VietGAP, GlobalGAP, ASB, and BAP is increasingly common, reflecting a commitment to quality and sustainability in production practices.
(ii) To conquer a difficult market like Europe, businesses need to carefully study the market in terms of demand, culture, and consumption habits.
Some solutions to focus on:
To reduce costs effectively, businesses should prioritize collaboration with logistics and product distribution partners while exploring new, high-efficiency channels to minimize marketing expenses.
It is necessary to create unique products but must meet the tastes and consumption habits of the EU, products must ensure quality but make a difference with other countries.
Create a "Made in Vietnam" brand to gain prestige and trust from the EU market
Building representative offices in handling customer complaints about orders and related issues.
Product packaging must meet 2 eye-catching and environmental protection criteria
To establish a presence in the EU market, domestic companies must collaborate with EU enterprises to leverage existing resources Understanding your partners is crucial for success Additionally, participating in trade fairs and connecting through booths is vital for networking and meeting potential partners within the EU.
To maximize the advantages of the EVFTA, enterprises must thoroughly analyze its provisions, particularly regarding export regulations, SPS (Sanitary and Phytosanitary measures), TBT (Technical Barriers to Trade), and the importation of materials from member countries It is essential to address any ambiguities by promptly seeking clarification from the relevant authorities.
To strengthen the community spirit among domestic seafood export and processing enterprises, it is essential to foster collaboration not only with EU businesses but also among local companies This collective effort will facilitate the successful entry of goods into the EU market However, the current business community is facing challenges, including instances of unfair competition and a lack of trust in partnerships, which need to be addressed to ensure a thriving seafood industry.
To progress effectively, it is essential to harness the spirit of solidarity, a cherished tradition in our country for generations By prioritizing community and shared interests, we can exchange valuable experiences related to production processes, business opportunities, and challenges faced This collaboration enables businesses to optimize costs throughout the entire journey, from farming to the final product.
The European Union (EU) stands as the most advanced regional association globally, characterized by a unified currency and coordinated political, economic, and security policies governed by shared regulations across the entire bloc.
The European Union has consistently grown and evolved, significantly impacting the global economy This shift marks a new era in bilateral trade, particularly in the context of Vietnam's exports to the EU, reflecting the economic transformations occurring on both sides.
To effectively capitalize on its developed market potential, Vietnam must prioritize export promotion measures, particularly for seafood products destined for the EU Despite the challenges posed by stiff competition and recent fluctuations in export performance, it is crucial for the government, ministries, and businesses to collaborate in enhancing the competitiveness of Vietnamese goods Leveraging the benefits of the Free Trade Agreement (FTA) between Vietnam and the EU will be essential in this effort.