return icon

Prospects for those with good grip on rule of origin

The enforcement of the landmark EU-Vietnam Free Trade Agreement can become reality within the next few months, ushering in multiple benefits for both sides.

Phan Van Chinh, director general of the Agency of Foreign Trade under the Ministry of Industry and Trade, scrutinises one of the essential legal requirements about rules of origin of export products, promising to benefit local businesses from its enormous incentives after the deal comes into effect.

prospects for those with good grip on rule of origin
Phan Van Chinh, director general of the Agency of Foreign Trade under the Ministry of Industry and Trade

Could you clarify the rules of origin (ROO) under the EU-Vietnam Free Trade Agreement (EVFTA) compared to others with Vietnam’s engagement?

The ROO within the EVFTA is not a new concept to Vietnamese firms as it has been built up and negotiated by leveraging the ROO principle in the General System of Preferences (GSP) that has been in place for many years now. Until now, many local firms have become beneficiaries of the GSP system when exporting products to EU. However, compared to other FTAs, the ROO under the EVFTA features new points, both in the way the criteria are explained, as well as in associated regulations. For instance, several export items such as textiles are liable to use material from certain countries who are not members of the agreement. Albeit not absolutely new, the ROO under EVFTA is fairly complex. Therefore, to effectively avail of the opportunities from the deal, local businesses should be well prepared for the execution once the EVFTA comes into force.

Would you briefly describe some particular ROO requirements applicable to Vietnam’s major exports into the EU?

For seafood products, the ROO will be applied to raw and processed seafood which shall be wholly obtained (WO), meaning that the seafood needs to be raised in EVFTA member countries. The WO rule for seafood under EVFTA is deemed as more flexible compared to the GSP.

Regarding textile items, the “yard-forward” principle is used for exporting textile products to EU countries, meaning that the fabric must be produced in Vietnam or any EU member country. Simultaneously, the products also need to meet specific requirements on processing stated in the agreement. The EVFTA, however, allows using 10 per cent of the weight of yarns or fibres and 8 per cent of the value of material of other sources in the production process.

Meanwhile, footwear products can use materials from outside sources, except some attached parts for shoes. The requirement is deemed stricter than in several other FTAs but not new to the footwear industry.

Is there any difference in the mechanism of setting the ROO under the EVFTA compared to other FTAs?

The mechanism in setting the ROO is happening between government agencies and it takes 10 months for the relevant agencies to join efforts in setting the ROO. In the case of an importing country continually detecting fraudulent acts related to the ROO, or the exporting country lacks co-operation, not allowing the importing country to verify the ROO at the production site, the two sides must discuss rectification measures.

If after 30 days both parties fail to reach a consensus, the case shall be submitted to the Committee for the EVFTA Implementation. The importer shall take measures temporarily such as ceasing the incentive if no remedy could be reached after 60 days.

What businesses should best avail of the incentives right after the EVFTA’s enforcement?

As the ROO under the EVFTA mandates a large involvement of material sources within the FTA’s area like in the case of seafood and footwear, local businesses need to bolster their production, processing, and sourcing capacity within the region or develop domestic sources. In the meantime, Vietnamese businesses must take the initiative in communicating about the ROO and how to implement it after the EVFTA comes into effect.

In addition, businesses should be proactive in promoting trade activities with the engagement of EU partners in the quest for new partners and material sources, thereby expanding the supply chain in the region as well as advancing further into EU markets. VIR

VN lawmakers ratifies Vietnam-EU FTA

VN lawmakers ratifies Vietnam-EU FTA

Lawmakers voted on a resolution ratifying the Vietnam-EU Free Trade Agreement (EVFTA) during the June 8 session of the nine session of the 14th National Assembly.

How the EVFTA and EVIPA will help Vietnam lure investment

How the EVFTA and EVIPA will help Vietnam lure investment

The approval by the Vietnamese National Assembly of the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA) is a historic achievement. 


Mega-urban project Vinhomes Ocean Park 2 - The Empire launched

Vinhomes Joint Stock Company has officially launched the mega-urban project Vinhomes Ocean Park 2 - The Empire.

'Urban wonders' in Vinhomes Ocean Park 2 - The Empire

The focus of the real estate market in the East of Hanoi at present is the Vinhomes Ocean Park 2 - The Empire project.

New medical technique helps men with no sperm become fathers

Hung Vuong Hospital has performed a technique using immature sperm and mature eggs for two fathers who cannot produce sperm.

SEA Games 31: Vietnam retains regional ‘throne’ in athletics

Athletics competitions of SEA Games 31 wrapped up on May 19 with the last four events and host Vietnam retaining its ‘throne’.

Late President Ho Chi Minh in the hearts of int’l friends

Late President Ho Chi Minh was not only a beloved leader of the Vietnamese people, but his life and career also left good impressions on many international friends and won their hearts.

US agrees to import Vietnamese pomelos

The Ministry of Agriculture and Rural Development (MARD) has just received a notice from the US authorities saying they have completed the appraisal of procedures of importing Vietnamese pomelos.

Lao student studies Vietnamese to achieve artistic dream

Before deciding to study in Vietnam, Ting Yangkeo was already passionate about one thing: art.

Cultural flower tour opens

Hanoi-based travel company Asia Exotica has just launched a new service offering tourists a chance to experience Hanoians' long history of floral tradition.

Vietnam has huge potential for saving energy: experts

For a developing society and economy like Vietnam’s, energy is the engine behind growth, especially in post-pandemic recovery.

HCMC needs over US$3 bln for housing development

The People’s Committee of Ho Chi Minh City has just reported to the Ministry of Construction on implementing the housing policy and real estate market in 2022.

Blockchain industry yearns for new talent

A serious shortage of personnel has become a bottleneck hindering the development of blockchain companies, even though Vietnam is among the top five countries globally in terms of blockchain tech.

Vietnam tops SEA Games 31 medal tally with 125 golds

Vietnam had claimed 125 gold, 76 silver and 74 bronze medals as of May 18 evening, the sixth official competition day of the ongoing SEA Games 31, retaining the top position in the medal table.

Prime Minister Pham Minh Chinh concludes US trip

Prime Minister Pham Minh Chinh and his entourage arrived in Hanoi on May 19, successfully concluding their trip to the US to attend the ASEAN-US Special Summit, and to make visits to the US and the United Nations.

Raising the ‘Mekong river monster’, farmer pockets billions of dong

Ho fish (Catlocarpio siamensis), called the ‘Mekong river monster’, are being raised by farmers in cages on rivers in Vietnam.

Vietnam highlights vital importance of security and safety in East Sea

Senior Lieutenant General Hoang Xuan Chien, Deputy Minister of National Defense led a Vietnamese delegation to attend the ASEAN Defense Senior Officials' Meeting Plus (ADSOM Plus) held in Phnom Penh, Cambodia on May 18.