EVFTA – Leverage for the “integration” of Vietnam’s fishery 

Vietnam’s fishery in 2019 

Seafood production in 2019 has grown rapidly, reaching more than 8 million tons, up 5.7% over the previous year. In particular, aquaculture production was estimated at more than 4.4 million tons, up 6.5% and fishing production reached more than 3.7 million tons, up 4.5%.

Fishery production output, 2010 – 2019

Source: VIRAC

In 2019, the total value of seafood exports is estimated at over US $ 8.5 billion, down 2.8% compared to 2018. According to VIRAC, this decline is reflected in many items that are considered strengths of Vietnam’s fishery. For example, shrimp, pangasius and squid declined significantly in value due to fierce competition from India, Ecuador, Indonesia, and Thailand.

Vietnam’s top seafood export market, 2019

Source: VIRAC

In general, 2019 is a turbulent and challenging year for Vietnam’s fishery: complex commodity prices in the world, increasing trade competition, and trade tensions between the United States and China. escalation affecting exports; prices of aquatic raw materials declined; …

In the face of the complicated development of the Covid-19 epidemic in early 2020 affecting the fisheries sector, the EU has soon completed the entire process of ratifying the EVFTA Agreement. The agreement is being implemented and is expected to come into effect in July. This will be a lever to revive Vietnam’s economy after the Covid-19 pandemic.

Opportunities are opened for EVFTA Agreement

Vietnam’s participation in new generation FTAs ​​such as CPTPP and EVFTA has opened a new door for seafood export. The signing of the EU-Vietnam Free Trade Agreement (EVFTA) will be a great opportunity for Vietnam to break out and compete with strong competitors in the region.

  1. Favorable certification of origin and customs procedures

Self-certification mechanism (allowing all three importers, exporters or producers to self-certify origin) is assessed as a flexible mechanism and facilitates business In the export process.

Vietnam is the country with the second largest number of enterprises eligible to be licensed for export to Europe (about 461 enterprises, accounting for 75%), after China. Seafood exports to the EU have achieved positive growth as businesses increasingly meet the EU’s requirements for food safety and seafood enterprises are enjoying the universal preferential tariff (GSP) from the EU.

  1. Tariff preferences

EVFTA brings a great opportunity for Vietnam to trade goods with a tax rate of 3.5% lower than the normal tax rate in the GSP, up to 80% of seafood products take advantage of the GSP preferential.

The tariff commitments from EVFTA will be effective and have a great impact on Vietnam’s seafood exporters. Especially, when Vietnam has access to the market with 28 countries that have never had FTA but it is the biggest seafood consumption market in the past years such as EU, Canada, Mexico, and Peru.

According to VIRAC forecast, with favorable natural conditions together with EVFTA Agreement, which takes effect in 2020, will create many favorable conditions for exporting seafood to EU market. Based on the results achieved in 2019, seafood export forecast in 2020 is about 9.3 billion USD, an increase of 8.8% compared to 2019.

Related report: https://viracresearch.com/industry/vietnam-fishery-industry-comprehensive-report-q1-2020

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