Can Vietnam’s enterprises take full advantage of EVFTA?

Deputy Minister of Industry and Trade Tran Quoc Khanh, speaking at a recent conference, expressed his concern about the indifference shown by many Vietnam’s enterprises to EVFTA (EU-Vietnam Free Trade Agreement).

Khanh fears that they will not take full advantage of the opportunities and warned that the benefits would fall into foreigners’ hands.

Can Vietnam’s enterprises take full advantage of EVFTA?



By using certificates of Vietnamese origin of goods, foreign invested enterprises will be able to more easily penetrate the European markets. Thus, the beneficiaries are not Vietnamese enterprises but foreign investors.

Pham Ngoc Hung, deputy chair of the HCM City Business Association, said there are many reasons behind this.

First, the negotiation process for the agreement was too long. It kicked off in October 2010 and the agreement was only approved by the EU Parliament in 2020.

As they had to wait too long, their interest in the agreement decreased.

Second, the large enterprises which have been exporting products to the EU for many years might have had good knowledge about EVFTA as well as other agreements.

Woodwork and footwear companies, for example, have been learning about agreements and seeking partners, while large corporations are using legal consultants.

Meanwhile, SMEs, with small production scale and limited financial capability, understand that they are incapable of exporting products to the choosy market. Therefore, they don’t intend to learn more about the agreement.

By using certificates of Vietnamese origin of goods, foreign invested enterprises will be able to more easily penetrate the European markets. Thus, the beneficiaries are not Vietnamese enterprises but foreign investors.

Hung said the fear that foreign investors will take all opportunities away from Vietnamese enterprises is completely ‘realistic’.

 

Exports to the EU now just account for 2 percent of total exports, which means that there are still great opportunities for Vietnam’s enterprises to increase the proportion.

However, enterprises need to renovate their production process and improve the quality of goods. Only products with high quality which can satisfy requirements can enter European markets.

Hung said the EVFTA has opened a ‘highway’ for Vietnam’s enterprises to go to Europe. However, they need to travel on modern cars, not rudimentary ox carts.

“In other words, Vietnam’s enterprises have to upgrade, or they will fail to enter the European market,” he said.

He proposed that the Ministry of Industry and Trade (MOIT) strengthen connections with Vietnamese trade counsellors overseas, especially in European countries, to provide updated information to businesses and help minimize legal risks.

MOIT and VCCI also need to change the ways of working, and eliminate complicated administrative procedures which cost enterprises a lot of time and money.

Kim Chi

EVFTA benefits yet to be seen

EVFTA benefits yet to be seen

While the whole world was aggressively fighting Covid-19, Vietnam and the European Union ratified the EU-Vietnam Free Trade Agreement (EVTFA).

EVFTA: Vietnamese goods to face stiff competition

EVFTA: Vietnamese goods to face stiff competition

Vietnamese goods are likely to face intense competition once the EU-Vietnam Free Trade Agreement (EVFTA) takes effect in early August, economists have forecast.

 
 

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