Opportunities for Vietnam's fisheries sector from EVFTA
After EVFTA takes effect, a number of processed seafood products with high basic tax rates will be reduced immediately to 0%; frozen black tiger shrimp is reduced from the basic rate of 20% to 0%; pangasius has a 3 year tax reduction roadmap, etc.
The EU is the second largest export market for seafood (after the U.S.) and always accounts for 17% -18% of Vietnam's total seafood export value. In particular, shrimp exports to the EU accounted for 22% of the market share, pangasius accounted for 11%, seafood products accounted for 30-35%, etc.
With Vietnam's National Assembly ratifying the EVFTA agreement yesterday (June 8), according to the Vietnam Association of Seafood Exporters and Producers (VASEP), joining new generation free trade agreements (FTA) such as EVFTA brings many opportunities for export industries such as fisheries, especially opportunities from import and export tariffs.
For EVFTA, right after taking effect, there will be nearly 50% of the tariff lines with the base tax rates from 0-22% (most of the rates of 6-22%) will be reduced to 0% (about 840 tariff lines). About 50% of the remaining tariff lines with a base tax rate of 5.5-26% will be reduced to 0% after 3-7 years.
Two main aquatic products, i.e. shrimp and pangasius with tariff reduction road map: frozen black tiger shrimp (HS code 03061792) is reduced from the basic rate of 20% to 0% immediately, other shrimp products follow the 3-5 year road map. Particularly, processed shrimp products will have a seven-year tariff reduction road map. Pangasius has a 3-year tax reduction road map, and smoked fish with a seven-year tariff reduction road map.
In addition, joining the new generation FTAs such as EVFTA, Vietnam seafood will have the opportunity to expand export markets, increase competitiveness compared to competitors (India, Thailand) without FTA with partners; attract foreign investment, improve production technology and product quality; ensure a more transparent and stable business environment and institutions (thanks to improved regulations and policies in line with FTA provisions).
Over the past 20 years, Vietnam's seafood export has grown on average 13% per year, from more than USD 600 million to nearly USD 9 billion. Fishery is one of the leading sectors in international integration. Products are exported to 160 markets in the world with a strong increase in key products such as shrimp (USD 3.5-4 billion/year); pangasius (USD 1.8-2.2 billion/year); tuna, octopus (USD 1-1.2 billion/year) and other marine products (USD 1.2-1.5 billion/year), etc.
However, according to VASEP, besides the opportunities, there will also be new challenges for Vietnam's seafood industry when joining EVFTA such as: technical barriers, quality standards, strict rules of origin, more new and more complex regulations, while our products are less competitive in price compared to FTA partner countries, etc.
Seafood businesses need to know and apply flexibly the rules of origin of FTAs (goods must meet the rules of origin specified separately for each FTA); make the most of tariff preferences (currently the utilization rate is not high).
- Agricultural trade surplus of USD 4.5 billion in the first half of the year
- VASEP: Shrimp exports to Canada increase despite the Covid-19 pandemic
- Fruit and vegetable exports brought in more than USD 1.5 billion over the first five months of 2020
- Vietnam won the contract to export 60,000 tons of rice to the Philippines
- Opportunities for Vietnam's fisheries sector from EVFTA
- Rice export prices increase to multi-year high
- Pangasius export turnover of five months decreased by 39%
- Seafood exports: Good signals from key products
- Taking advantage of EVFTA opportunities for improving agro-processing technologies
- Opportunities for Vietnamese rice