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HomeNews & ViewsIndustry FocusEU-Vietnam Free Trade Agreement (EVFTA) to boost Vietnam’s export market

EU-Vietnam Free Trade Agreement (EVFTA) to boost Vietnam’s export market

Experts say the EU-Vietnam Free Trade Agreement (EVFTA) is supposed to give Vietnamese companies  a host of opportunities to raise exports. However, in order to completely capitalize on the offer they do have to follow the strict criteria. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), Giang said companies in the sector believe in the prospect of the exports to the EU after the EVFTA comes into force, as tariffs will be cut to zero per cent.

However, businesses need to be thoroughly prepared to make use of the opportunities and have a solid grasp of the regulations within the agreement, because the EU is a demanding market with strict requirements on product quality and design. Phi Viet Trinh, General Director of the Ho Guom Garment JSC, said that in order to benefit from the preferential tariffs under the EVFTA, products must have a certain proportion of materials hailing from the EU or Vietnam. Therefore, management agencies and businesses alike must take certain action to maximize the opportunities.

Nguyen Quoc Tuan from Vinh Thong Co, an exporter of footwear to Europe, expects the EVFTA to raise exports over the rest of 2020. However, he also acknowledges that the company will encounter a range of difficulties in adhering to the rules of origin of the agreement, since while 60 percent of its input materials come from domestic suppliers, the rest come from elsewhere, mainly China. Additionally, upgrading technologies and increasing the size of production are troublesome provided that the internal resources of the company remain modest.

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