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The recently concluded free trade agreement between Vietnam and the European Union after three years of negotiations offers tremendous opportunities for both Vietnamese and European producers to find growing markets for high quality agricultural products, Phil Hogan, European Commissioner for Agriculture and Rural Development, said at a recent seminar.
Vietnamese agricultural products such as cashew nuts, coffee and fisheries have proved a success in Europe, and with agriculture being the E.U.'s second favorite import last year, the bloc holds a lot of potential.
A large number of European consumers are keen to discover Vietnam’s exotic fisheries products. In September this year, one fifth of Vietnam's tuna catch touched down in the E.U. market, and tuna exports to Italy climbed 116 percent compared to the same period last year.
“Vietnamese fisheries have successfully established presence in 160 countries and territories and the fact that they meet all food safety requirements to enter the E.U. market is a good sign for our agricultural products,” Cao Quoc Hung, vice minister of the Ministry of Industry and Trade, said at the seminar. The FTA opens the door for Vietnamese products to dominate the E.U. market, Hung added.
Vietnamese coffee has also seduced German caffeine lovers.
Vietnam has recorded a trade surplus with the EU28 since 2010. “After the FTA comes into force, bilateral trade will definitely be intensified and reach a new high,” Commissioner Hogan said.
The E.U. was Vietnam's second largest export market after the U.S. in 2015, data from the customs department showed.
By implementing the FTA, nearly all custom duties will be eliminated. As soon as it takes force, tax on fisheries and around half of pharmaceuticals and chemicals will be cut to zero. The remaining duties will be abolished over the next few years. The E.U. has also decided to eliminate duties for some textile and garment products.
The government expects wages for skilled laborers to go up by 12 percent while salaries for common workers are expected to rise by 13 percent as a result of the EVFTA.
The EVFTA will come into effect from January 1, 2018, and is estimated to contribute an additional 8 percent to Vietnam's GDP by 2025.
The free trade agreement is considered one of the most comprehensive and ambitious trade and investment agreements the country has signed, and is the second agreement in Southeast Asia after Singapore. “It is a win-win game for Vietnam and the 28 countries in the EU,” said Hogan.
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