EVFTA Agreement - an opportunity for exporters

The European Union Vietnam Free Trade Agreement (Hereinafter referred to as EVFTA Agreement) officially took effect on August 1, 2020. The EVFTA is a new free trade agreement with a high standard, comprehensiveness, large openness and balance of interests for both sides. With a strong commitment to open the market and abolish import duties up to nearly 100% of the European Union's (EU) tariff, the EVFTA has opened up great opportunities and prospects for export enterprises of the province in particular and the whole country in general, promoting export turnover, compete equally in market share with businesses in European markets. Especially, the strong export products of the province have been highly cut taxes such as: textiles, footwear, electronics ...

 Garments production for export at Tien Hung Joint Stock Company

According to statistics, there are about 300 enterprises exporting goods to the markets of over 140 countries and territories around the world. In addition to traditional markets such as China, Korea, India and Japan, the EU is one of the new and rich potential markets that are being focused on exploiting by businesses in the province. The main export items to the EU of the province are garments and leather shoes. This is also the main product, which accounts for 50-60% of the province's export turnover and develop well due to the advantages of abundant and cheap labor resources. In addition, some products of vegetables, food, bamboo and rattan, plastic products have conquered these markets. In the first 6 months of the year, due to the influence of the Covid-19 epidemic, the province's export turnover was estimated to reach at USD 2,150 million. The Industry and Trade sector is expected that by the end of 2020, the total export turnover of the province will reach about 4,800 million USD. Some export enterprises of the province have made efforts to change the technology and production process to meet the standards of goods to make it suitable for the EU market, step by step making their own mark with importers, enterprises and major EU distributors such as: Phu Minh Bamboo and Rattan Export Company Limited, Hung Yen Garment Corporation - Joint Stock Company, Tien Hung Joint Stock Company, Viet Y Garment Joint Stock Company ...

The implementation of the EVFTA Agreement brings a lot of potential opportunities for Vietnamese garment exporters in general and Hung Yen in particular, because this is the largest market for textile consumption. According to EVFTA commitment, textiles and garments to the EU will immediately reduce tariffs to 0% for about 42.5% of tariff lines, the rest will decrease to 0% in the next 5-7 years. However, the EVFTA rules of origin for textiles are strict “from fabric onwards”. This is not a small challenge because currently, raw materials for garment production in the province still rely on imports and according to processing orders. Viet Y Garment Joint Stock Company, located in Khoai Chau district, has continuously exported textile and garment products to Germany, the US, Japan and the EU for many years. Like many other textile companies in Hung Yen, sensing great opportunities from EVFTA, but in reality, there are still many challenges. Mrs. Nguyen Thi Hien, General Director of Viet Y Garment Joint Stock Company, said: The EU market is a very demanding and strict market, but if you can access it, the chance of success is very high. According to Mrs. Hien, in order for exported goods to enter the EU and take advantage of tax incentives like the signed EVFTA Agreement, export enterprises must raise their own level.

Comrade Nguyen Van Tho, Director of the Department of Industry and Trade, said: The EU is one of the main export partner markets of the province. The potential of this market is still great. With the strong commitment of market access, EVFTA is expected to help the province's export turnover to the EU grow strongly. However, in order to take full advantage of the opportunities as well as minimize the challenges encountered in the implementation of the agreement, businesses need to quickly invest in improving the quality of products and goods to raise competitiveness due to very high technical standards and trade barriers for commodities entering the EU market, which are directly related to consumers' health. In addition, each export enterprise needs to proactively grasp the contents of EVFTA, especially the commitment related to tariffs associated with the rules of origin to make better use of opportunities and deeper participation into the global supply chain.

Source: baohungyen.vn