Businesses and management agencies should be fully aware of the regulations and rights included within the EU-Vietnam Free Trade Agreement (EVFTA) before the trade deal fully comes into effect.
|Many Vietnamese export items enjoy advantages in the EU market|
The EVFTA is expected to be ratified by the Vietnamese National Assembly in late May with the trade deal scheduled to enter into force on the first day of the second month after both sides notify each other of the completion of the ratification procedures, or alternatively at a mutually agreed upon time. With this in mind, the EVFTA will officially become effective from July.
Major challenges ahead for local businesses
According to an impact assessment conducted on the EVFTA, in addition to creating advantages in terms of market opening and tariffs, one notable challenge is the increase in competitive pressure on domestic goods as a result of high quality product lines from Europe which enjoy wider access to the Vietnamese market.
Luong Hoang Thai, Director of Multilateral Trade Policy Department under the Ministry of Industry and Trade, stated that the EU market has placed strict requirements on product quality as well as the process of producing commodity items. Therefore, upon the implementation of the EVFTA, the country must move to streamline the process of institutional and administrative reforms to move them in line with practices that are internationally recognised as well as striving to improve overall competitiveness.
Despite the EU market having similar regulations regarding technical barriers for food safety, technical requirements as well as food safety quality are part of the minimum and mandatory requirements set by the EU. Consequently, this is one of the more significant challenges that Vietnamese enterprises must attempt to overcome.
Offering recommendations to local firms when participating in the trade deal, Luong Hoang Thai advised companies to make greater efforts in a bid to improve product quality and design, as well as many other factors as a means of overcoming barriers imposed by partners in order to win over European consumers.
"Many Vietnamese businesses are very familiar with the EU market and their experiences need to be shared with others so that they can learn and change the production process to meet the requirements from the EU. For managers, we need to harmonise the institutional and administrative process to take full advantage of opportunities from the EVFTA," Thai said.
At present, the majority of Vietnamese businesses are fully prepared to seize and expand upon a wealth of opportunities for trade exchange with the EU market that will exist once the Agreement is officially implemented.
According to economist Le Dang Doanh, the EVFTA is widely considered to be a driving force in accelerating economic restructuring. Therefore, in order to actively participate in the EVFTA, domestic industries must focus their attention on forming value chains as a way of improving the added value of commodity products.
“Vietnamese businesses can fully capitalize on opportunities brought about by FTAs, but it is important to boost reforms and efforts to restructure the economy even more by improving the quality of human resources and strengthening linkages between training establishments and enterprises," Doanh noted.
Finalizing the EVFTA Implementation Plan
In a report presented at the ninth session of the ongoing 14th National Assembly regarding the ratification and implementation of the EVFTA, Minister of Industry and Trade Tran Tuan Anh pointed out that, besides the positive and clear impacts of the deal in terms of economic, legal, and institutional reforms in line with international standards, the Agreement is set to help reduce poverty in a swift manner.
In order to ensure the effective and total implementation of the Agreement, the Government has outlined the main contents of its plan regarding the implementation of the EVFTA over five major areas, including information, building laws and institutions, improving competitiveness, devising guidelines and policies for trade unions and labour organisations at a grassroots level, and initiating policies regarding social security and sustainable development.
Given the major orientations and main contents of the plan, Prime Minister Nguyen Xuan Phuc has requested that the Ministry of Industry and Trade co-ordinate efforts with relevant ministries, agencies, and People's Committees of centrally-run provinces and cities to compile a set of plans to implement the trade deal effectively once it comes into force, the minister said.
Additionally, ministry leaders have been urged to look into law-regulated documents at a governmental level in an attempt to ensure that these documents were issued at the time of the EVFTA coming into force, he added. VOV