Proactively take advantage of opportunities from EVFTA
10:52 06/01/2021
From August 1, 2020, the Free Trade Agreement Vietnam and the European Union (EVFTA) took effect. Accordingly, the export tax of hundreds of commodity lines to the European market will be 0%, creating opportunities and challenges for many key export industries of Vietnam in general and Bac Ninh in particular. In order for businesses to make the most of the benefits and proactively face the challenges from the Agreement, the Department of Industry and Trade actively implements action plans to provide practical support to businesses.

EVFTA is a comprehensive, high quality, balanced agreement of interests for both Vietnam and the European Union (EU), and in accordance with the provisions of the World Trade Organization. As soon as the Agreement comes into effect, the EU will abolish import duties with about 85.6% of tariff lines, equivalent to 70.3% of Vietnam's exports to the EU. After 7 years from the date of entry into force of the Agreement, the EU will eliminate import duties on 99.2% of tariff lines, equivalent to 99.7% of Vietnam's export turnover.

With a commitment to eliminate nearly 100% of the tariff schedule and open the market in a short time, EVFTA is expected to be a boost to Vietnam's export growth and investment attraction. To put it simply, many Vietnamese products exported to European countries will be exempt from and reduced taxes and Vietnamese people will also have the opportunity to use products from Europe at much lower prices than currently.

For enterprises in Bac Ninh, the EU is the second largest export market with annual export turnover of 3-5 billion USD, accounting for 9-11% of the total export turnover of the province (statistic data) in period 2015-2019. The main products are telephones, electronic equipment, textiles, agricultural products ... The effective EVFTA Agreement brings many opportunities for businesses in the area, especially the province's products, which have many competitive advantages such as handicraft village products, textiles, agricultural products, processed foods ... Products and components in the supporting industries for the strong sectors of the province such as electricity - electronics, mechanical engineering, high technology. However, the fact also shows that EVFTA poses many challenges, especially non-tariff requirements, technical barriers ... The EU is a difficult market, so the requirements for food safety and Traceability with agricultural products or rules of origin for textile and footwear products ... must be strictly followed. Meanwhile, the production capacity of enterprises in the province is still limited. When the agreement takes effect, the market is expanded, businesses will have to face more risks in order production. For large orders, if there is no requirement from the European market, the damage will not be small.

In order to support enterprises to improve their competitiveness, overcome technical barriers, and make good use of opportunities gained from EVFTA, right after the EVFTA comes into effect, the Department of Industry and Trade regularly updates information about the Agreement to post on the Department's portal (http://sct.bacninh.gov.vn); information and support for businesses in the province to register to participate in online conferences on EVFTA organized by the Ministry of Industry and Trade and ministerial agencies such as: Online conferences Support SMEs to take advantage of opportunities, effective test EVFTA; Online conference on implementing EVFTA Implementation Plan; on-line training courses on commitments in EVFTA… The Department proactively consulted with the Provincial People's Committee to issue the EVFTA Implementation Plan in the province; Coordinate with relevant departments, agencies and units to implement the Agreement in accordance with the roadmap issued by the Provincial People's Committee.

As the governing body in the implementation of EVFTA, in the coming time, the Department of Industry and Trade will set up a focal point to provide information, guidance and clarify the contents of commitments and related issues. EVFTA. Propagate and publish publications, brochures and research on the Agreement, focusing on areas of interest to the province. Strengthening the provision of information on technical requirements, regulations and practices on goods import and export management and trade defense of EU countries to enterprises. Develop trade promotion programs and develop markets for strong products that can be exported to EU countries. Organize exchanges, trade promotion forums, strengthen connections between businesses in the province, nationwide and abroad to form supply chain development, exchange technology, and market access experience. According to Mr. Pham Khac Nam, Deputy Director of the Department of Industry and Trade, although state agencies have provided great support to businesses, the main decisive factor is still the efforts of each enterprise. Because the EU is a potential market but also challenging and competitive.

To conquer this market, businesses need to affirm product development in terms of raw materials, origin of goods, product quality, even in terms of competition with other countries; comply with technical barriers, develop high-quality human resources, especially in engineering - technology, law and finance; promote the application of science and technology to the management and operation, production and business, professionalize the sales process, actively build and promote the brand ... For the business community, especially small and medium enterprises. , it is necessary to improve the connection between enterprises inside and outside the province, between the domestic and other countries to form a good supply chain and have a long-term production plan, adapting to the integration ... taking advantage of the advantages that EVFTA brings ”./.

Source: baobacninh.gov.vn Translated by Nguyen Mai Huong, Chief of Office, Bacninh IZA
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