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Taking advantage of EVFTA opportunities for improving agro-processing technologies

03/06/2020

According to economic experts, in order to prepare for the post-Covid 19 period, agriculture in general and agricultural product export enterprises in particular need to take advantage of the EU-Vietnam Free Trade Agreement (EVFTA) which is expected to be ratified by the National Assembly and takes effect in August, fulfilling the target of export turnover of USD 42 billion this year and further developing agricultural product processing industry for export and developing hi-tech agriculture.

The EU, with a population of 508 million, GDP of USD 18,000 billion, is the second largest import market in the world, with an annual import spending of USD 2,338 billion, while Vietnam's export market share in the EU is about 2% and with just over 42% of Vietnam's exports to the EU enjoy zero tariffs under the Generalized System of Preferences (GSP). Therefore, with the EVFTA Agreement coming into effect, the elimination of import tariffs will be an opportunity for Vietnamese agricultural enterprises to boost exports of agricultural products into this market.

According to economic expert Nguyen Minh Phong, agriculture is expected to be one of the biggest beneficiaries when EVFTA takes effect. At that time, tariffs of many Vietnamese commodities will be reduced to 0% such as broken rice, grain products, etc. For fruits and vegetables, the EU is also committed to eliminating taxes when EVFTA takes effect. For seafood products, about 50% of tariff lines will be eliminated, the remaining 50% will also be eliminated in 5-7 years.

In the far future, it is forecasted that the export growth of some Vietnamese agricultural products will increase significantly until 2025 thanks to EVFTA, such as rice (with an increase of 65% ​​in 2020), sugar (8%), pork (4%), forest products (3%), meat from cattle and poultry (4%), beverages and tobacco (5%).

On the other hand, EVFTA will also attract investment projects in the agricultural sector, helping to transfer technologies and ways of organizing production in agriculture, thereby helping to increase production and quality of agricultural products, helping Vietnam's agricultural products gradually meet the rigorous standards of the European market.

This is also an essential step of Vietnamese agriculture to not only overcome many barriers such as technical barriers of the EU on origin, product quality, or intellectual property protection, etc. but also gain opportunities for developing turnover in other fastidious markets such as the United States, Japan, Australia and Middle East countries.

Also according to Mr. Phong, the development of agricultural product processing industry for export and high-tech agriculture is also in line with the objectives of the agricultural industry, bringing Vietnam's agricultural, forestry and fishery processing industry “rank among the top 10 countries in the world” by 2030, is a global center for deep processing and global agricultural logistics with sufficient processing capacity to meet the requirements of agricultural production with the growth rate in value of deeply processed agricultural products reaching 7-8% per year.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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