Vietnamese Enterprises Are Not Ready For The Implementation Of The Vietnam Europe Free Trade Agreement

According to Vietnam news on August 4, experts are worried about the slow response of Vietnamese enterprises in seizing the opportunity to enjoy preferential tariff of Vietnam Europe free trade agreement (evfta).

Nguyen Haiming, vice president of the European Chamber of Commerce in Vietnam, said that evfta came into effect on August 1, but only 2% of the 8600 local enterprises knew the details of the free trade agreement, and only about 20% of them fully understood the agreement. It is imperative that they really understand the content of the agreement and the conditions for its implementation.

Ruan Haiming said that some textile enterprises were choosing whether to meet the rules of origin in order to enjoy the preferential tariff in the FTA. At present, the main imported raw materials of Vietnamese textile enterprises still come from China. Therefore, if the suppliers are not changed, their products will not meet the origin requirements of evfta. He pointed out that some enterprises have said that if they purchase materials from qualified suppliers at a higher price to enjoy the preferential tariff under the agreement, it is not as cost-effective as the tariff on materials purchased from China under the currently applicable EU generalized system of preferences (GSP). After the FTA comes into effect, it needs to be made clear that the application of tariff will be stopped in Vietnam.

In addition, evfta's rules of origin are very complex, which is why many Vietnamese mask manufacturers are not eligible to export to the EU even if they have customers, because they do not have the required medical certificates. Moreover, when working with European partners, Vietnamese enterprises do not know about food hygiene and safety conditions.

Another problem is the material area. At the beginning of this year, when EU companies announced that they would stop using plastic packaging and use recyclable materials, many Vietnamese enterprises immediately switched to paper and bamboo packaging, according to Nguyen. However, when EU enterprises request to provide information on raw material area for production packaging, Vietnamese enterprises cannot confirm the provision. Planning raw material zones for export products is a challenge for both Vietnamese enterprises and the government.

Zhang Wenjin, vice president of Vietnam textile and Garment Association, said that he hoped that the Ministry of industry and trade would complete the "textile and clothing industry development plan 2035" as soon as possible. The plan must clarify the requirements for the construction of Vietnam's textile and clothing industrial park, including details of wastewater treatment, so as to build large-scale dyeing and textile projects, and ensure that its products meet the requirements of evfta's origin and also meet the requirements of evfta The requirements of the comprehensive and progressive trans Pacific Partnership Agreement (cptpp).

After the entry into force of evfta, Vietnam is expected to surpass Bangladesh as the world's second largest textile and clothing export market. Chen Guoqing, Vice Minister of Vietnam's Ministry of industry and trade, said that if the domestic textile and garment industry does not have supporting industries, it may be difficult to achieve this goal. Wu Jinlu, President of the Vietnam chamber of Commerce and industry (VCCI), also agreed with the proposal, saying that this is an important issue that should be paid attention to by various ministries and departments. If Vietnam's textile and garment industry can not be attracted, it will not create favorable conditions for the development of Vietnam's textile industry. VCCI has proposed that Congress enact the auxiliary industry act to attract a new round of foreign direct investment. Wu believes that the country also needs to carry out institutional reform, improve the legal framework, and improve the investment and business environment to meet the requirements of evfta.