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French consumers choose rice products "Vietnamese Rice" at Leclerc supermarket. Photo: TL

A catalyst for commercial growth

Assessing the results after 2 years of implementing the EVFTA, Minister of Industry and Trade Nguyen Hong Dien said that the EVFTA is a great advantage for Vietnam when only four Asian countries have signed FTAs ​​with the EU. Vietnam and Singapore are members. As one of the first new-generation FTAs ​​the EU signed and implemented with a developing country, the EVFTA not only gives Vietnam the opportunity to expand and diversify markets, but more importantly, support the transition of economic restructuring, improving the business environment, investing and taking advantage of cooperation with the EU in new and important areas such as green and digital transformation, energy transition, circular economy, and sustainable development. These are areas of strength and priority for development in EU policy, and also in line with Vietnam's strategic socio-economic development orientations.

According to calculations from the General Department of Customs, in the second year of EVFTA implementation (from August 2021 to July 2022), the total import-export turnover between Vietnam and the EU reached US$61.4 billion, an increase of 11.9% compared to the first year the agreement came into force. In the first eight months of 2022, two-way trade turnover recorded an increase of 14.85% over the same period in 2021, reaching US$42.4 billion.

As one of the enterprises that have achieved many successes in the EU market thanks to the EVFTA, Mr. Nguyen Duy Thuan, General Director of Loc Troi Group Joint Stock Company, said that in September, the first 1,000 tons of Vietnamese rice were exported. The first brand of "Vietnamese Rice" is officially present in two large supermarket chains in France, Leclerc and Carrefour, with over 40,000 points of sale. Up to now, after only four weeks, all 1,000 tons of this rice has been sold.

To achieve that success, Loc Troi has prepared and changed efforts since 2016 to meet the strict standards of the EU market, including production, quality, and environmental criteria, and labor. Specifically, this enterprise has planned planting areas, and worked with farmers and local authorities to carry out rice traceability.

Especially, Mr. Thuan said, through the Vietnam Trade Office in France, in early 2022, Loc Troi had 20 meetings in a month to understand the market as well as the requirements of the European side. Up to now, Loc Troi has been able to receive orders directly from partners without going through a third party. Currently, partners have also ordered the next shipments for production and export in 2023.

Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association also said that in the first eight months of 2022, Vietnam's textile and garment industry has exported more than US$3 billion to the EU market. Notably, Vietnamese textiles and garments have penetrated 26 of 27 countries in the EU. In which, Germany has the largest proportion with nearly US$800 million, the Netherlands nearly US$700 million, France nearly US$500 million, the markets of Belgium, Spain, Italy reach US$200-350 million. In particular, Vietnam's textile and garment export turnover to Romania achieved an impressive growth rate of 736%.

“EVFTA is the key to open the door to the EU market and help Vietnamese textile and garment products diversify their markets in the EU instead of just a few traditional markets like before,” said Mr. Giang.

Lots of potential

Although many positive results have been achieved, according to Mr. Ta Hoang Linh, Director of the European - American Market Department (Ministry of Industry and Trade), Vietnam's export turnover to the EU has only reached 2% of total import turnover of the EU. The reason is that businesses still focus on exploiting traditional markets such as Germany, France, the Netherlands, and Italy, while in other markets in the EU bloc, the market share of Vietnamese products is still very low.

Another reason for this is that there are still very few businesses that understand and take advantage of the benefits of the EVFTA. According to Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade), only 8% of enterprises clearly understand the EVFTA. Meanwhile, the EU is promoting the resumption of negotiations with countries such as Thailand, the Philippines, and Indonesia. Because it is still in the negotiation process, in the short and medium term, Vietnam's advantages are still there, but in the long term, this will be a big challenge for Vietnamese enterprises and it is necessary to prepare for the EU to conclude FTA negotiations with countries in Southeast Asia.

Sharing this view, Mr. Alain Cany, President of the European Business Association in Vietnam, pointed out that only an EU resolution requiring documents related to VAT also causes difficulties for Vietnamese enterprises. This is a testament to the obstacles of not knowing the contents of the EVFTA. Therefore, it is very necessary to improve the capacity of enterprises.

To improve this, Mr. Ngo Chung Khanh said, the Ministry of Industry and Trade has made great efforts in propagating, training and providing information to enterprises. Instead of printing long, dry sets of documents, the Ministry of Industry and Trade has built short videos with a duration of about 5-6 minutes, focusing on each specific field and industry, helping businesses to understand more easily.

In addition, according to experts, the trend of green consumption in Europe is also one of the factors that open up opportunities for Vietnamese goods in this large market. Alain Cany said that in order to take full advantage of the EVFTA, Vietnamese enterprises need to comply with strict environmental standards and meet the tastes of green and sustainable consumption in Europe.

The story of the textile industry is a testament to the benefits of meeting Europe's green criteria. Mr. Vu Duc Giang said that under pressure from brands, 15-17 years ago, Vietnamese textile and garment enterprises began to build a vision to invest in green factories and sustainable development. This has helped the export turnover of textiles and garments to Europe achieve sustainable growth over the years.

In the future, Minister of Industry and Trade Nguyen Hong Dien said that with the great advantage from the EVFTA and the Investment Protection Agreement between Vietnam and the European Union (EVIPA), Vietnam has many advantages and favorable conditions in attracting investment, technology transfer, and supporting projects from EU partners to promote the economic structure towards green and sustainable, including the issue of clean energy use, renewable energy, high-tech transformation, helping Vietnamese goods meet EU technical and environmental standards, and participate more deeply in a sustainable complete supply chain, and win-win with the EU.