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EVFTA, the new nudge to increase export to the EU market

EVFTA, the new nudge to increase export to the EU market

Friday 15, 05 2020
According to statistics, by the end of April 2020, the most affected market by COVID-19 was Europe, including many import and export partners with Vietnam such as Germany, England, and France, etc., all of which have recorded a decline.

The export of many key commodities of Vietnam was significantly affected by the COVID-19 pandemic in the first months of the year. According to statistics of the Ministry of Industry and Trade, after the last 4 months, exports of agricultural and fishery products have decreased by 5.4% and fuel and mineral products have decreased by 15.4%. Tran Thanh Hai, Deputy Director of the Import and Export Department (of the Ministry of Industry and Trade) has had an interview with reporters on Vietnam's import and export activities as well as the solution to implement the annual plan.

Looking back on the import and export activities of Vietnam in the first months of the year, what are your comments?

​COVID-19 is a global pandemic affecting every aspect of life, including export and import activities. Accordingly, immediately after it happens, the pandemic has severely damaged trade, especially that at the border gates with China.

China is the biggest trade partner of Vietnam which provides a lot of imported materials for multiple manufacturing sectors. Therefore, in February, when the pandemic occurred, the implementation of pandemic prevention measures at border gates has made it difficult for the commodity flow between the two nations, especially for material import.

The next difficulty is that the markets in Europe and the United States have also dropped significantly because the disease has also been spreading in these regions. As shopping and trade activities have declined due to the fact that many countries have applied blockade measures, these markets are almost frozen, strongly affecting Vietnam's export activities to them.

Currently, Vietnam has basically controlled the disease, but in many countries, the disease is still very complicated and this is certainly influencing import and export activities as they are related to the continuation of goods traffic. Although sea trade has been basically stable, road and air traffic have not been restored as before, so the disease impact is quite serious and we have not been able to fully assess the consequences.

EVFTA, the new nudge to increase export to the EU market

In your opinion, which products and markets are most affected?

According to statistics, by the end of April 2020, the most affected market was Europe, including many import and export partners with Vietnam such as Germany, England, France, Italy, and the Netherlands, etc., all of which have recorded a decline.

In the last 4 months, Vietnam maintained an export growth of approximately 5%, which is not a negative index, yet compared to that in previous years, this is still a much lower number. Particularly the export growth rate to the United States is higher than that to other markets because, before the outbreak of the disease, we signed a contract, and export to this region has remained relatively stable, but in the coming time it is expected to record a decline.

For markets that have signed FTAs like Vietnam-EU or CPTPP, what do you think the impact is?

Regarding CPTPP, in addition to the three ASEAN countries, Vietnam also has other major markets such as Canada, Australia, and Japan. Regarding Japan, Vietnam still maintained the same growth rate as before, but for Australia, the decline has also been also seen. As for the EU, the decline is much lower. However, when the COVID pandemic is over, the EVFTA agreement will go into operation to create a new "push" for businesses to increase exports to the EU market.

At this time, Vietnam is starting a new normal context, so how are the solutions of the Ministry of Industry and Trade to export goods while ensuring the prevention of the pandemic?

Currently, ministries and agencies are still focusing on solutions to remove obstacles in the border areas, especially in the Northern border with China. In fact, in the context of pandemic prevention, cross-border export, especially that in Lang Son, is still relatively slow and the number of unsold vehicles remains relatively large. Therefore, removing difficulties for these areas is still a key solution. In addition to preparing for the recovery of markets, promotion activities are also important.

For upcoming FTAs like Vietnam-EU (EVFTA) or Vietnam-Cuba agreement, in my opinion, propaganda about benefits and how to take advantage of these benefits, especially through rules of origin, is also important. In addition, the Ministry of Industry and Trade intends to work with associations to review recommendations for businesses to overcome these difficulties, thereby proposing the Government to have final solutions.

Although the epidemic is complicated, with the current context, the Government has not adjusted its objectives. What do you think are the factors to achieve the highest import-export value this year?

Right from the end of 2019, the target of 300 billion USD in turnover has been evaluated as a major target. As COVID-19 pandemic sweeps through countries, it has seriously affected their capacity and export implementation.

Export turnover and value have plummeted after 4 months and are expected to decline in the next few months if the epidemic is under control. The government has not yet adjusted the growth target and we determine that it is a milestone to strive for in the coming time. It is hoped that when the epidemic is controlled globally, economic and social activities will recover and production growth will strive to reach this goal.

What is the spare ground for the last months of the year to create motivation for development?

Recently, as the pandemic reaches its peak, the demands of the global market have seemed to be compressed. However, once the pandemic passes, it is clear that consumer’s demands will inflate. It may not be too strong, but it is also an attraction for exporting countries like Vietnam to push goods to those countries. Thank you.

>> EVFTA increases the trade defense pressure


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