Vietnamese goods still face difficulties entering the EU.

Strict regulations on food quality and hygiene are a major obstacle for Vietnamese goods, especially agricultural products, when exporting to the EU market.

Vietnamese businesses must seize every opportunity to enhance their competitiveness and comply with regulations, standards, and technical requirements to build their own brands. (Illustrative image)

Difficulties stem from packaging and packing.

Despite having experience exporting tea to the EU market, Mr. Than Dy Ngu, Director of Vietnam Ecological Linkage Company, admitted that exporting to this market is not easy. Evidence of this is the continuous decline in Vietnam's tea exports to the EU in recent years, from holding 20% ​​of the EU market share (in 2007) to less than 7% (in 2013). The reasons for this decline include the lack of traceability systems in Vietnamese tea businesses, excessive levels of chemical residue limits (MRLs), a lack of special certifications related to producer social responsibility, and inconsistent quality.

Perhaps, food safety and quality requirements are common challenges that Vietnamese businesses face when exporting to the EU market. According to Mr. Nguyen Manh Hung, head of the import-export department of Hoang Lien Son Technical Ceramics Joint Stock Company, the biggest difficulty his company faces when exporting ceramic products to the EU is the technical requirements for packaging and packing. Moreover, meeting all the criteria set by the EU would result in very high production costs and make the products less competitive compared to similar products from other markets, especially China.

Sharing the difficulties faced by businesses, Mr. Nguyen Manh Dung, Head of the Processing Department, Department of Agricultural, Forestry, and Fisheries Processing and Salt Production (Ministry of Agriculture and Rural Development), said that the EU is a demanding market with increasingly high requirements for goods and services. In particular, EU consumers do not accept goods of average or low quality. “This is a characteristic that Vietnamese businesses must strive for because Vietnam's production practices still prioritize quantity over quality,” Mr. Dung said. Regarding agricultural products, the EU wants to import Vietnamese agricultural products to meet consumer demand and to process them for re-export within the bloc. However, the trend of importing for processing is being prioritized by the EU because they want added value in processing Vietnamese raw materials. Meanwhile, Vietnam's export orientation is to gradually increase export value by promoting the export of processed goods to improve people's income. "This is a relatively large contradiction in trade and a difficult problem that Vietnam needs to find the most appropriate solutions for," Mr. Dung said.

Building a reputation

Experts and relevant ministries and agencies consider the export opportunities to the EU market to be enormous, given the large Vietnamese population in Europe and the growing demand for Vietnamese agricultural and food products there. In particular, the signing of the Vietnam-EU Free Trade Agreement (FTA) will multiply these opportunities for Vietnamese goods to be exported to the EU. According to figures provided by Ms. Maylis Labayle, Director of Trade Policy at the European Chamber of Commerce in Vietnam (Eurocharm), Vietnam's exports to the EU could increase by 30-40%, with key products including rice, coffee, tea, seafood, honey, textiles, and footwear.

According to Mr. Nguyen Manh Dung, even before the FTA was signed, Vietnamese agricultural products exported to the EU still had an advantage over similar products from China and other ASEAN countries. This is because Vietnam remains on the list of countries benefiting from the EU's Generalized System of Preferences (GPS), while most other ASEAN countries have been excluded. China also has an advantage in agricultural products, but its import volume is limited.

According to Mr. Ta Hoang Linh, Deputy Director of the Trade Promotion Department (Ministry of Industry and Trade), the EU is currently an important trading partner of Vietnam, a highly developed market with complex control systems regarding product standards and regulations. Currently, only about 42% of Vietnamese goods benefit from the EU's Generalized System of Preferences (GSP). However, if a successful FTA with the EU is signed, at least 90% of Vietnamese goods will enjoy a 0% tariff rate. Therefore, Vietnamese businesses must seize every opportunity now to enhance their competitiveness and comply with regulations, standards, and technical requirements, aiming to expand opportunities to penetrate this market. The representative from the Ministry of Agriculture and Rural Development suggested that each business must thoroughly research and develop an export development strategy to meet market demands, build a brand for both the business and its products, and increase competitiveness. "Without building credibility and a strong brand, it will be very difficult for businesses to enter the EU market," Mr. Dung emphasized.

According toHQ Online