The significance of the study
The EVFTA Agreement, effective from August 1, 2020, marks nearly a decade of Vietnam's dedication to negotiations, resulting in a comprehensive and high-quality pact that aligns with WTO provisions This agreement is expected to boost Vietnam's GDP by an average of 2.18-3.25% from 2019 to 2023, 4.57-5.30% from 2024 to 2028, and 7.07-7.72% from 2029 to 2033 It will significantly enhance Vietnam's export market, with projections indicating a 20% increase in export turnover to the EU by 2020, 42.7% by 2025, and 44.37% by 2030 The commitment to eliminate nearly 100% of import tariffs presents substantial opportunities for Vietnamese exports, particularly in the fisheries sector, which is vital to the national economy and has strong potential in European markets.
In the past time, there have been a number of research projects on EVFTA such as:
The article examines the effects of the EVFTA on Vietnam's textile, garment, and footwear industries in the first quarter of 2021 It highlights the anticipated growth of these sectors following the agreement's implementation, which has significantly boosted Vietnam's exports to the EU market The study underscores the strong impact of the EVFTA on trade recovery for these commodity groups.
In the context of the complex developments of the Covid-19 epidemic, the EU has been significantly impacted by the disease Isolation and lockdown measures, coupled with economic repercussions, have led to a decline in consumer demand for non-essential goods, including imported textiles, leather, and footwear products However, the EVFTA has played a crucial role in revitalizing exports in these two industries over the past five months.
In 2020 and the early months of 2021, various analyses highlighted the trade dynamics between Vietnam and the EU, providing valuable insights into policy, market trends, and business information Notable publications, such as the "Vietnam - EU Trade in the First Quarter of 2021" and the "Business Manual: EVFTA and Vietnam's Fruit and Vegetable Industry," offer comprehensive overviews of the EVFTA commitments These resources detail the implications for key export sectors, including wood products and the fruit and vegetable industry, while also identifying opportunities and challenges for Vietnamese enterprises, along with practical recommendations for navigating the evolving trade landscape.
While previous studies have evaluated the effects of the EVFTA on various Vietnamese export sectors, there has been a lack of research specifically focusing on its impact on Vietnam's seafood exports Consequently, the author aims to conduct a detailed analysis of this important topic.
Research purpose and tasks
Target
The project aims to investigate the impact of the EVFTA on Vietnam's seafood export industry and to propose effective solutions for maximizing the benefits of this trade agreement.
Mission
To achieve the above objectives, the topic focuses on solving 3 main tasks:
- Clarifying trade relations between Vietnam and EU from 1995 to present
- Analyze the impact of the EVFTA on Vietnam's seafood exports to the EU
- Proposing recommendations and solutions to promote Vietnam's seafood industry in the context of joining EVFTA
Research scope
Time
Actual data of the seafood industry for analysis related to the impact of the EVFTA Agreement will be carried out when the Agreement comes into force
Space
Impact of the EVFTA Agreement on Vietnam's seafood exports to the EU.
The methodology
The article applies scientific research methods including: statistical methods, data collection, analysis and synthesis methods, qualitative methods
The statistical method of data collection is essential for synthesizing economic data from related countries, ensuring accurate results This approach involves gathering secondary data from various sources, including books, newspapers, specialized magazines, scientific conference proceedings, research institution reports, and data from the websites of enterprises, ministries, and both domestic and foreign press agencies.
The analytical and synthetic methods involve statistical analysis to highlight both the positive and negative aspects of the EVFTA Agreement This approach enables the drawing of conclusions and predictions regarding its impact on various sectors.
4 the seafood industry produce From there, the topic concludes and recommends solutions to promote the supply chain in the textile industry in Vietnam
Qualitative research methods involve consulting experts and conducting discussions and interviews with professionals in the field, including researchers, managers from the Ministry of Planning and Investment, and faculty members from the Academy of Policy and Development.
Structure of thesis
The structure consists of 3 chapters:
Chapter 1: Overview of Vietnam-EU trade relations from 1995 to present Chapter 2: Impact of the EVFTA on some groups of Vietnamese exports to the
Chapter 3 offers key recommendations and solutions aimed at enhancing the effective utilization of commitments from the EVFTA These strategies are designed to optimize the benefits derived from the agreement, ensuring that stakeholders can fully leverage the opportunities presented by the EVFTA for economic growth and development.
OVERVIEW OF EU-VIETNAM TRADE ECONOMIC AND
Overview of EU-Vietnam economic and trade relations
The European Union (EU) was born in a rather special situation, it was a
"ruined" Western Europe after World War II (1954) in which the warring country was the largest country (Germany) Therefore, the main goal of the founders of the
The European Union aims to foster peace among European nations, reduce hostilities between Germany and France, strengthen ties among member countries, and prevent conflicts within Europe.
Over the past 60 years, the European Union (EU) has significantly expanded from its original six founding countries to 28 member states, showcasing remarkable growth in both size and integration The EU has achieved a high level of economic integration across five key forms: free trade area, customs union, common market, monetary union, and economic union Additionally, the EU has made substantial progress in institutional reform, policy-making, foreign policy consolidation, and enhancing its security authority.
The European Union (EU) is recognized as the most successful association organization globally, evolving from economic ties to socio-political connections through supranational institutions that respect the autonomy of its member states Currently, the EU's socio-economic development is characterized by a strong integration of member nations while maintaining their independence.
The European Union covers a land area of 4.48 million km², representing 3.38% of the global total Notably, there is a significant disparity in land sizes among member countries, with France being the largest at 1,753 times the size of the smallest member, Malta.
Economic: Currently, the EU is the largest economic union in the world In
In 2019, the European Union's GDP at current exchange rates was approximately 15,593 billion USD, representing around 20% of global GDP However, there is a significant income disparity among member countries, with EU15 nations like Germany, the UK, and France exhibiting much higher GDP levels compared to newer members, primarily former Eastern European countries, which experience a lower standard of living.
Population: In 2020, the population of the EU is expected to reach 448 million people However, the population size of the countries is also quite high
In 2019, the GDP per capita of the Union was $37,642 per person per year, highlighting significant disparities in income levels across different countries This variation in economic performance reflects the diverse characteristics of the EU market.
The European Union (EU) is a key trading partner for Vietnam, consistently accounting for a significant portion of the country's exports in recent years Since the establishment of trade cooperation in 2000, the relationship has rapidly evolved, marking 30 years of diplomatic relations in 2020 Throughout this period, despite global fluctuations, Vietnam and the EU have fostered a strong partnership, achieving important milestones that enhance Vietnam's international integration and contribute to the EU's development.
7 cooperation between the two sides have been the basis for opening a promising new chapter of bilateral relations Specifically:
In 2019, two-way trade between Vietnam and the EU reached $49.8 billion, with Vietnam exporting $35.8 billion, securing a 1.8% market share and ranking 11th among the largest exporting countries to the EU Key exports from Vietnam expected to thrive in the EU market include textiles, footwear, agro-forestry-fishery products, and plastic products.
The EU-27 stands as one of Vietnam's largest export markets, following the United States and China Within the global trading landscape, Vietnam ranks as the 17th largest trading partner for the EU-27, the 8th in Asia, and the second largest within the ASEAN region.
The European Union, comprising 27 member countries, presents a diverse market characterized by varied consumption features Despite differences in customs and consumption patterns, these nations share economic and cultural similarities, particularly in Western and Northern Europe The socio-economic development levels across the EU are relatively uniform, leading to common preferences and consumption habits among its citizens For imported goods to succeed in this market, they must meet stringent standards for quality, origin, design, hygiene, and safety European consumers tend to favor globally recognized brands, associating them with high quality and reliability, which provides peace of mind regarding their purchases.
EU is a difficult market luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
The EU market is known for its discerning consumers who prioritize careful selection of imported goods EU importers and consumers maintain high standards and exhibit more caution compared to other major markets, such as the United States, ASEAN, and China Furthermore, the EU enforces stringent import management policies that impose rigorous technical standards related to food hygiene and safety, animal and plant quarantine, good agricultural practices, and organic agriculture, all aimed at safeguarding consumers and the environment.
The EU prioritizes consumer protection by emphasizing safety and health standards within its market To ensure product safety, the EU conducts inspections at production sites and maintains an alert system among member countries for toxic incidents, eliminating border inspections It enforces national and European regulations to prohibit the trade of products from countries that do not meet EU safety standards Additionally, the EU implements stringent labeling requirements, particularly for food, beverages, pharmaceuticals, and silk fabrics, while regulating product ingredients and preservation methods Violations such as improper packaging, smuggling, and copyright infringement are met with strict penalties.
Despite the growing value of imports from non-EU countries, the EU remains a significant and promising market However, entering and establishing a presence in this market is challenging due to intense competition from a multitude of global producers and exporters who are increasingly focused on this lucrative opportunity.
1.1.2 Overview of the cooperation relationship between Vietnam and the
Vietnam and the European Union (EU) established diplomatic relations on November 28, 1990, marking the beginning of a rapidly evolving partnership characterized by significant growth in both breadth and depth.
The European Union has emerged as a key partner for Vietnam, particularly in the areas of economy, trade, and investment, significantly contributing to the country's socio-economic development and international integration Since the establishment of diplomatic relations, the Vietnam-EU partnership has rapidly expanded in both scope and depth, necessitating a new cooperation framework to replace the 1995 Vietnam-EC Framework Agreement In June 2005, the Vietnamese Prime Minister approved a Master Plan for Vietnam-EU relations through 2010, with a vision extending to 2015, emphasizing the goal of establishing an "equal partnership and comprehensive, long-term cooperation" for peace and development The Ministry of Foreign Affairs was tasked with negotiating and signing the Partnership and Comprehensive Cooperation Agreement (PCA) with the European Union.
Vietnam-EU trade relation from 1995 to now
1.2.1 The current situation of Vietnam-EU trade relations in recent years
Overview of Vietnam's goods exports to the EU
The European Union is a significant market for Vietnam, accounting for a substantial share of its exports Since 2000, trade relations between Vietnam and the EU have grown increasingly strong and effective The year 2020 marks a pivotal point in this evolving partnership.
This year marks the 30th anniversary of diplomatic relations between Vietnam and the European Union (EU) Over three decades of cooperation, the partnership has consistently evolved, overcoming global challenges and fostering significant advancements This enduring relationship has played a crucial role in Vietnam's development and has contributed to the EU's growth as well.
12 international integration process The achievements of cooperation between the two sides have been the basis for opening a promising new chapter of bilateral relations
Figure 1.1 - The total import and export volumn between Vietnam and EU, period 2015 - first 10 months of 2020 (Unit: million USD)
Source: General Department of Customs
Table 1.1 - Value of exports and imports by continent and country in the first nine months of 2020 and compared to the same period in 2019
EU 32,95 -7,5 16,3 13,91 2,8 7,5 luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Source: General Department of Customs
Regarding export market structure: The main exporting countries of
Vietnam's exports to the EU remain concentrated in traditional markets, including the Netherlands, Germany, France, Italy, Spain, Belgium, and Poland Notably, the Netherlands leads with an export value of \$6.88 billion, despite a 2.89% decline since 2018 Germany follows closely at \$6.56 billion, down 4.63%, while France's exports stand at \$3.76 billion, showing a slight decrease of 0.01% In contrast, Italy has experienced significant growth, with exports rising by 18.46% to \$3.44 billion, and Austria's exports increased by 19.93% to \$3.27 billion Spain's exports grew by 3.38% to \$2.72 billion, Belgium's by 5.83% to \$2.55 billion, and Poland's by 12.42% to \$1.50 billion Sweden also saw an increase, reaching \$1.18 billion, up by 2.39%.
Table 1.2 - Top EU markets Vietnam exported over 1 billion USD in 2019
Number Market Value of export in
Increase/Decrease in comparison with
5 Austria 3,27 -19,93 luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Source: General Department of Customs
The import-export relationship between Vietnam and the EU is characterized by significant complementarity and minimal direct competition, owing to the distinct strengths and characteristics of their goods Vietnam excels in exporting a variety of products, including phones and components, computers, electronic products, textiles, aquatic products, and machinery Conversely, the EU exports machinery, medical supplies, computers, electronic products, and chemicals to the Vietnamese market.
Vietnam's key exports include phones and components, valued at \$12.21 billion (a decrease of 7.23%), and footwear, which rose to \$5.03 billion (an increase of 7.51%) Other significant exports are computers and electronic products at \$4.66 billion (up 8.13%), textiles and garments at \$4.26 billion (up 3.90%), and machinery and equipment at \$2.51 billion (increasing by 21.63%) Seafood exports fell to \$1.25 billion (down 13.07%), while coffee exports decreased to \$1.16 billion (down 14.91%) Notably, plastic materials saw remarkable growth, reaching \$19.13 million (up 235.42%), along with paper products at \$13.94 million (up 175.56%), and cameras and camcorders at \$30.70 million (up 139.83%) However, some sectors experienced declines, including iron and steel at \$238.28 million (down 33.98%) and chemicals at \$38.35 million (down 16.83%).
USD, down 11.37%), seafood (1.25 billion USD, down 13.07%) and coffee (1.16 billion USD, down 14.91%)
Table 1.3 - Export structure of some main products of Vietnam to the EU market in the period of 2017-2019
8 Bag, wallet, vali, hat, umbrella 0,88 0,93 0,97 +3,9%
10 Means of transport and spare parts 0,70 0,67 0,81 +21,2%
Vietnam has faced significant challenges in exporting to the EU due to the negative impacts of the Covid-19 pandemic However, the EVFTA agreement offers a promising solution by committing to eliminate nearly 100% of tariffs, effective immediately upon its implementation.
In August 2020, Vietnam achieved a significant milestone in its trade relations with the EU, exporting $3.25 billion worth of goods, which reflects a $300 million increase from July This upward trend continued into September, with export turnover rising by 14.4% compared to the same period in 2019.
By the end of September 2020, Vietnam issued nearly 15,000 Certificates of Origin (C/O) form EUR.1, generating close to 700 million USD in exports to 28 EU countries The primary products receiving these certificates included footwear, seafood, plastics, coffee, textiles, bags, suitcases, vegetables, and rattan and bamboo items Most of these exports were directed towards EU countries with significant seaports and distribution centers, such as Belgium, Germany, the Netherlands, and France.
IMPACT OF THE EVFFTA ON SOME GROUP OF
Overview of the EVFTA Agreement
In October 2010, Vietnam's Prime Minister and the President of the European Union initiated negotiations for a Free Trade Agreement (EVFTA) following the completion of technical preparations by both parties.
On June 26, 2012, Vietnam and the EU officially announced the commencement of negotiations for the EVFTA Agreement After nearly three years of discussions, which included 14 official sessions and numerous ministerial meetings, both parties reached an agreement in principle on the core elements of the Agreement Ultimately, the EVFTA was officially signed on June 30, 2019, and it took effect in August of the same year.
2.1.2 The main comitments of EVFTA
The EVFTA is a new-generation agreement that features extensive and high-level commitments, comprising 17 chapters and 2 protocols Key areas of commitment within the EVFTA include various sectors aimed at enhancing trade and economic cooperation.
Exporting goods between two sides + general terms (called written commitments); and + specific tariff schedules (called market access commitments)
Rules of origin, including: luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
+ Determining common rules of origin + specific rules of origin for certain goods
The Sanitary and Phytosanitary Measures (SPS)
The Technical Barriers to Trade (TBT)
Trade in services (the text is related to general regulations and commitments to open markets)
+ General provisions (called written commitments); and + Specific tariff scheduled on opening service market (called market access commitments)
Investment + General principles of investor treatment + Dispute settlement mechanism between the State and foreign investors
Trade and Sustainable Development (including environment, labor),
Collaboration and capacity development Below is a summary of the key issues in EVFTA:
1.1 Commitment to open the EU commodity market luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Upon the Agreement's implementation, the EU will remove import taxes on approximately 85.6% of tariff lines, representing 70.3% of Vietnam's export turnover to the EU After seven years, this will increase to 99.2% of tariff lines, covering 99.7% of Vietnam's export turnover For the remaining 0.3% of export turnover, the EU has committed to providing Vietnam with a tariff quota that includes an import tax of 0% within the quota.
Nearly all of Vietnam's exports to the EU will be eliminated following a brief roadmap, marking the highest level of commitment received from partners in signed Free Trade Agreements (FTAs) This advantage is particularly significant as the EU remains one of Vietnam's two largest export markets today.
Table 2.1 - Summary of EU open-door commitments for some important commodity groups of Vietnam Commitment The tariff commitment of EU to Vietnam
Group of Agricultural - Aquatic products
(except for canned tuna and fish balls)
About 50% of tariff lines will be removed immediately when the agreement takes effect
According to a schedule of 3 to 7 years, the remaining 50% of tariff lines will be eliminated
EU will aplly tariff quotas for canned tuna and fish balls 11,500 tons and 500 tons, respectively
Rice Applying the tariff rate quota mechanism, imports within the quotas enjoy a tariff rate of 0% luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
The total quota is 80,000 tons, specifically: unmiiled rice, milled rice, and fragrant rice are 20,000; 30,000; 30,000 tons, respectively
For broken rice, the import dutieswill be completely eliminated after 5 years and rice products is 3-5 years’ schedule
Coffee When Agreement comes into force, import duties will be completely eliminated
Sugar For white sugar, EU will aplly 10,000 tons of tariff rate quota, and products contain more than 80% sugar is also 10,000 tons
Natural honey Import duties will be completely eliminated as soon as the
Fresh and processed fruit and vegetable products, fruit juices, fresh flowers
Import duties will be completely eliminated as soon as the Agreement comes into force
EU applies tariff quota commitments for some Vietnamese products
Processed poultry eggs: 500 tons Garlic: 400 tons
Sweet corn: 5,000 tons Tapioca: 30,000 tons Mushrooms: 350 tons luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Ethyl alcohol: 1,000 tons Other chemical products (mannitol, sorbitol, dextrins, ): 2,000 tons
Textile 42.5% of tariff lines of import duties of will be removed when Agreement comes into force
Import duties of the remainder will be eliminated according to a schedule of 3-7 years
Import duties of about 83% of tariff lines will be eliminated as soon as the Agreement comes into force
For the remaining 17% of import duites (including particle boards, fiber boards and plywood ), it will follow a schedule of 3-5 years
Computers, electronic products and components
74% of tariff lines of import duties of will be removed completely as soon as the Agreement comes into force
Import duties of the remaining products will be eliminated according to a schedule of 3-5 years
Some other products Many products like plastic products, phones of all kinds and components, bags, wallets, suitcases, hats, umbrellas will be also eliminated import tariff
The footwear import duties, which currently stand at 37% for various tariff lines, will be completely eliminated upon the implementation of the Agreement.
A schedule of 3-7 years will be applied for import duties of the remainder
Commitment to opening the goods market of Vietnam
Vietnam is committed to eliminating tariffs on 48.5% of tariff lines, representing 64.5% of import turnover, as soon as the Agreement takes effect Within 7 years, this will increase to 91.8% of tariff lines, covering 97.1% of EU export turnover After 10 years, approximately 98.3% of tariff lines will be eliminated, accounting for 99.8% of import turnover For the remaining 1.7% of EU tariff lines, Vietnam will implement a roadmap for tariff elimination over more than 10 years or apply tariff quotas in accordance with WTO commitments.
Table 2.2: Summary of Vietnam’s market access commitments to some important EU commodity groups Commitment Vietnam’s tariff commitments to the EU
Devices 61% of tariff lines will be eliminated import duties since
A maximum 10-year schedule will be apllied for the remaining import tariff
Whole cars and components, spare parts for cars and motorcycles
A car is over 2500 cm3 for diesel and over 3000 cm3 for gasoline cars will reduced 0% in the 9 th year
For the remaining cars, it will follow a 10-year tariff reduction commitment luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
With all types of auto parts, import dutied will be eliminated in the 7 th year
The tariff roadmaps 0% for motorbikes and motorcycles over 150 cm3 are 10 years and 7 years, respectively
Alcoholic beverages In the 7 th year, import duties for wines and hard liquors will be eliminated
A 10-year schefule is applied for beer
Raw meats 0% of import tariff on frozen pork and other types will be
7 and 9 years, respectively Exempting for chicken meat in the 10 th year After 3 years, beef will be removed
Pharmaceuticals Applying 0% import tariff for pharmeceuticals products when Agreement comes into effect
According to a schedule of 5-7 years, the remaining products will be eliminated
Chemical substances and products the chemical substances
Import duties of about 70% of these products will be exempt since 1 st August, 2020
In the 3 rd or 5 th years, import duties will be removed for the remaining products
In the 3 rd year of the Agreement, 44% products will eliminate
Within 5 years since 1 st August, 2020 the import duites of remaining products will be exempt luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Petroleum Import duties will be followed by 10 year schedule
Textile, leather and footwear raw materials
Since 1 st August, 2020; 80% of these products will be exempt from import duties
According to 3-5 years schedule, the remaining products will be exempt
Source: Ministry of Industry and Trade 1.3 Commitments on export tariff:
Both parties will not impose any export tariffs or fees, except in clearly defined cases According to the commitment results, only Vietnam has reservations regarding this issue, while the EU has no reservations.
Under this agreement, Vietnam and the EU will eliminate tariffs and fees on exports, excluding goods with reservations from Vietnam Additionally, no tariffs or fees will be applied to exports that exceed those imposed on domestic goods.
In Annex 2d Chapter 2 of EVFTA, it has some terms about the reservation of Vietnam, applicable to goods exported from Vietnam to the EU with the following main contents:
Vietnam is set to implement export tariffs on various products, including sand, shale, granite, certain ores and concentrates, crude oil, coal, coke, and gold Over the next five years, the current high export tariff lines will be adjusted to 20%, with the exception of manganese ore, which will see a reduction to 10% The export duties for other products will remain unchanged.
- Vietnam will eliminate export tariff for all other products according to a maximum 15- year schedule
1.4 Commitment on non-tarrif barriers luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Technical barriers to trade (TBT):
Vietnam and another country are dedicated to improving the enforcement of the Technical Barriers to Trade Agreement (TBT Agreement) established by the WTO, with Vietnam specifically pledging to increase the adoption of international standards in the formulation of TBT regulations.
Vietnam has committed to recognizing all technical conformity certifications for EU cars in accordance with the principles of the 1958 UNECE Agreement, as outlined in a separate Annex addressing non-tariff barriers to the automotive sector This recognition will take effect five years after the EVFTA comes into force.
Vietnam commits to accept the label “Made in EU” for non-agricutural products (except for pharmaceuticals) while still accepting specific lales of orgin from a specific EU country
Sanitary and Phytosanitary Measures (SPS):
Vietnam and the EU have established an agreement facilitating exports to Vietnam, with the management oversight being the responsibility of the relevant authorities in each specific EU member country involved in the trade of Vietnamese goods.
The European Commission oversees the coordination and inspection of control systems and legal frameworks across member countries, ensuring the consistent application of technical standards and regulations throughout the EU market.
The Agreement also includes commitments towards reducing other tariff barriers (eg: commitments on export/import licensing, customs procedires ) to facilitate import and export activities between the two Parties
1.5 Appendix on pharmaceuticals luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
The Agreement includes a dedicated Annex on pharmaceuticals, highlighting their significance as a key export product from the EU, representing 9% of total imports from the EU to Vietnam Both parties have pledged to implement measures that enhance the trade of pharmaceuticals between the EU and Vietnam Vietnam will permit foreign-invested enterprises to import pharmaceuticals, although they will not be allowed to engage in wholesale or retail sales, and can only resell to licensed distributors Additionally, Vietnam has committed to allowing EU contractors to participate in pharmaceutical bidding packages, subject to certain reservations.
2 Trade in Service and Investment
Vietnam and the EU are dedicated to fostering an open and favorable investment environment for businesses on both sides Vietnam's commitments exceed those made in the WTO, while the EU's commitments surpass WTO standards, aligning with the highest levels seen in recent EU Free Trade Agreements (FTAs).
Vietnam offers favorable conditions for EU investors in various sectors, including professional services, financial services, telecommunications, transportation, and distribution Both parties have committed to national treatment in investment and have engaged in discussions regarding dispute resolution between investors and the state.
Box 2.1: A number of EVFTA commitments to open service trading and investments from Vietnam to the EU Service:
Vietnam has committed to enhancing access for EU service suppliers beyond the provisions of the WTO agreement This commitment includes specific areas of service sectors, reflecting a significant step towards greater economic integration and cooperation between Vietnam and the European Union.
- Sea freight For financial, telecommunications, sea freight and postal services, Vietnam also commits to a series of binding rules
These products below will be commited to open for EU by Vietnam, such as
Vietnam is dedicated to eliminating restrictions on the assembly of marine engines, agricultural machinery, home appliances, and bicycle manufacturing within the machinery industry Furthermore, the country has made several commitments towards recycling initiatives.
Vietnam and the European Union have reached an agreement that aligns with the Government Procurement Agreement (GPA) of the World Trade Organization (WTO) This includes commitments such as implementing online bidding and establishing an electronic portal for publishing bidding information.
28 has a roadmap for implementation The EU is also committed to providing technical assistance to Vietnam to fulfill these obligations
We are dedicated to ensuring transparent procurement processes for ministries, central branches, and various units under the Ministry of National Defense, specifically for goods and services that are not related to national security This commitment extends to key entities such as Hanoi city, Ho Chi Minh city, Vietnam Electricity Group, and Vietnam Railways Corporation.
Overview of Vietnam's seafood industry
The region boasts a vast network of rivers and seas, featuring a coastline that stretches 3,260 kilometers and encompasses 226,000 square kilometers of internal waters Additionally, it has an exclusive economic zone exceeding 1 million square kilometers and is home to over 4,000 islands.
Vietnam boasts 12 bays and lagoons covering a total area of 1,160 km², making fisheries a vital traditional economic sector As the country continues to integrate into the global economy, the significance of this industry remains paramount.
35 seafood is also a dynamic industry, standing in the top of major export industries and developing continuously
2.2.1 The concept and classification of aquatic products
2.2.1.1 Definition There are many definitions given about aquatic products, but in general, fisheries are a general term for the resources and products brought to humans from the aquatic environment and exploited and raised by humans harvested for use as food, raw materials or for sale in the market Among aquatic products, the most common are fishing, farming and fishing activities Some species are herring, cod, anchovies, tuna, halibut, mullet, shrimp, salmon, oysters and scallops with high catches
2.2.1.2 Classify – Fish group: These are farmed animals with distinct fish characteristics, they can be freshwater or brackish water fish For example: pangasius, goby, eel… – Crustaceans: The most common is the group of ten-legged crustaceans, in which shrimp and crab are important culture objects For example: Crayfish, black tiger shrimp, white shrimp, land shrimp, sea crab
– Molluscs: Including species with lime shells, most are bivalves and most live in the sea (clams, blood cockles, oysters, snails…) and a few live in water sweet (clams, pearls)
Seaweeds: These are low-level plants, unicellular, multicellular, with small size species, but also large-sized species such as Chlorella, Spirulina, Chaetoceros, Sargassium (Alginate), Gracillaria
Reptiles are tetrapods characterized by their amniotic membranes, such as crocodiles, while amphibians, like frogs and snakes, are species capable of living both on land and in water These groups are often raised for their meat.
36 skins used as food or used in fine arts such as tortoiseshell (for fins), frogs (for skin and meat), crocodiles (for skin)
2.2.2 Factors affecting the export of seafood products
Domestic aquatic resources play a crucial role in shaping a country's export activities An ample supply of seafood not only satisfies local consumption but also fulfills export demands These resources encompass a variety of products, including those obtained through fishing, harvesting, and aquaculture.
Aquaculture and fishing activities are significantly influenced by a country's natural conditions and climate Factors such as wind, temperature, air quality, water environment, rainfall patterns, and salinity directly affect the growth and development of aquatic organisms, ultimately altering fishing and farming yields Additionally, extreme weather events like floods and storms pose serious challenges to aquaculture systems, particularly for brackish water shrimp and fish farming, as they can damage dykes and dams, disrupting export activities.
Legal system and management policies of the state
The legal framework and state management policies significantly impact seafood export activities by regulating aquaculture, fishing, and seafood processing, particularly concerning hygiene, safety, and sanitation standards Additionally, government incentives and support in capital and technology, along with international aid and support programs for the seafood industry, play a crucial role in enhancing a nation's seafood export capabilities.
A transparent and open legal system, along with effective economic coordination policies and a strong foreign policy, will be crucial for the success of graduate theses and master's theses.
37 the ability to attract, seek and cooperate with foreign partners economic cooperation, selecting consumption markets for export products
System of facilities, materials and techniques
The integration of science and technology in aquaculture and seafood processing has significantly enhanced efficiency, leading to improved quality and quantity of seafood This advancement not only boosts production but also facilitates more favorable conditions for exporting seafood products.
The establishment of a fishing service base involved three key areas: boat building mechanics, port development, and raw material supply services Additionally, an efficient equipment and product consumption system enhances seafood development and boosts seafood exports.
The condition of transport infrastructure significantly impacts the trade of fishery products Efficient transportation facilitates quicker seafood trade, reduces transaction times, enhances preservation, improves quality, and creates more opportunities for market engagement.
Economic factors of importing country nước
The economy significantly influences a country's import and export activities, particularly in the aquatic products sector A decline in national income leads to reduced consumer demand for imported seafood, creating challenges for exports to those markets Consequently, when consumers are less inclined to purchase high- or even medium-value goods, the overall export value diminishes, potentially resulting in financial losses for exporters.
Geographical factors, climate of the importing country luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Natural geographical and climatic factors significantly influence market demands, leading to varying requirements across different countries and regions For instance, products suited for temperate climates may spoil in tropical conditions, necessitating refrigeration or special storage methods Additionally, perishable goods must be preserved more effectively when entering markets characterized by high temperatures and humidity.
Political factors – laws of the importing country
The commodity market is significantly influenced by political and legal factors, which manifest through government incentives and obstacles for suppliers entering the national market These dynamics can facilitate business penetration and market expansion, but may also present challenges such as tariff barriers, protectionism, and quotas An unstable political relationship between importing and exporting countries can further complicate market entry for importers.
Regarding the tastes and habits of consumers in the importing country
General comments about Vietnam's seafood industry
Vietnam has a location and natural conditions suitable for fisheries activities
Vietnam boasts a stunning coastline exceeding 3,260 km and is home to around 4,000 islands The country's maritime exclusive economic zone spans over 1 million square kilometers, complemented by an inland water surface area of more than 1.4 million hectares due to its extensive river system Additionally, Vietnam's seafood reserves are estimated at 4.2 million tons, with renewable sources reaching 1.73 million tons.
State policy support luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Our Party and State always have timely policies to support the fisheries sector
The agricultural sector is a vital component of our country's economy, guided by long-term development objectives established in Decision No 332/QD-TTg Key regulations such as Decree 36/2014/ND-CP focus on the farming, processing, and exporting of agricultural products, while Decree 17/2018/ND-CP provides support for the construction of new offshore fishing vessels with a capacity of 800 CV or more.
High-quality aquaculture areas: Among shrimp export markets to the EU,
Vietnam ranks second in shrimp production, highlighting the crucial importance of quality The European Commission has approved approximately 200 shrimp processing factories in Vietnam that meet international standards Additionally, Vietnam is among the few countries holding ASC and BAP certifications, which signify adherence to sustainable shrimp farming practices As of 2019, 192 out of 200 processing establishments and 233 out of 349 shrimp farms have obtained BAP and ASC certifications, respectively.
Europe's market is challenging, as consumers prioritize products with proven provenance, guaranteed quality, and reputable brands Consequently, Vietnam's compliance with ASC and BAP certifications presents an opportunity to showcase its quality and competitiveness in the shrimp industry against other exporting countries In France, Germany, and other Northwest European nations, Vietnamese black tiger shrimp are recognized as high-quality products, frequently found in supermarkets and various retail markets In contrast, Bangladesh's black tiger shrimp, lacking the ASC certification, are viewed as a lower-tier option and are sold at reduced prices.
Vietnam has significantly enhanced its seafood export production through the widespread implementation of ecological shrimp farming in mangrove forests in recent years.
The advantages of Vietnamese shrimp are increasingly acknowledged, with significant improvements in quality and certification Pangasius farms have successfully obtained various international certifications, including Global GAP, SQF 1000, AquaGAP, BAP, and FOS, enhancing the appeal of Vietnamese shrimp in demanding markets Since 2010, 50 pangasius farms have qualified for ASC certification, while 1,900 hectares of farming facilities are VietGAP certified, representing 70% of the total area Additionally, 2,000 hectares have received ASC, Naturland, GlobalGAP, and BAP certifications Vietnam has also gained US approval for food safety control of catfish, demonstrating the recognized quality of its products and enabling expansion into global markets Currently, Vietnam holds a dominant 95% share of the global catfish fillet market.
Vietnamese workers possess a high level of skill in shrimp processing, backed by extensive experience, which is widely recognized in the industry This expertise allows Vietnamese enterprises to not only meet technical standards but also produce aesthetically pleasing products that capture consumer interest.
Over the past two decades, the pangasius industry has established legal regulations and quality inspection agencies that comply with the import standards of over 100 countries To access high-standard markets, particularly in Europe, farming and processing facilities must undergo rigorous inspections More than a decade ago, pangasius processing began to adopt advanced scientific and technical innovations Additionally, the stringent standards of the U.S market have led to the recognition of the inspection system for fish and catfish products, ensuring that pangasius from the South is raised in a clean and sustainable manner.
47 than all other fish, so the pangasius here is the most delicious nowhere else Due to strict inspection and processing regulations,
Vietnam boasts abundant aquatic resources, enabling it to cater to the diverse preferences of European consumers, particularly with its main products: pangasius and shrimp The country offers nearly 100 different pangasius products, with European markets showing a strong preference for pangasius fillets, breaded fish, spiced fish, and vegetable rolls In terms of shrimp, Vietnam primarily exports rock sucking shrimp, sea lobster, Tempura black tiger shrimp, and whiteleg shrimp Additionally, Vietnam focuses on four types of tuna: yellowfin, bigeye, longfin, and skipjack, which can be processed into loins, fillets, canned in oil, or bagged for export.
In addition, some products such as fins, fish fat, fishmeal, collagen, gelati are also exported
Despite a rise in export turnover to the EU, Vietnamese seafood holds a minimal market share The limited scale of Vietnamese enterprises hampers their ability to fulfill large orders, often leading to delays caused by financial constraints, low labor productivity, and issues with raw material supply Consequently, these challenges negatively impact the reputation of Vietnamese seafood in the international market.
The quality of Vietnamese seafood products, particularly during the sea processing and production stages, has not been adequately recognized, resulting in low export values to the EU In comparison to other countries, Vietnamese seafood is priced lower, leading to an insignificant total export value Additionally, fishing and aquaculture activities remain underutilized, with a cultivation area that is still limited despite the presence of abandoned and untapped land.
The fishing equipment in our country remains rudimentary and outdated, lacking the application of modern technology As a result, it is unable to effectively support offshore fishing, leading to low efficiency and failing to achieve the anticipated economic benefits.
The marketing stage of the business has often been overlooked, resulting in a lack of attention and brand development Consequently, the seafood brand "Made in Vietnam" remains largely unknown to many customers in the EU.
The method of market penetration is still heavily dependent on partners, without a specific strategy, as well as being proactive in approaching market research.
The impact of EVFTA on Vietnam’s seafood exports to the EU
2.4.1 EVFTA's commitments related to Vietnam's seafood exports to the
The EVFTA is expected to help seafood exports grow by about 2% in the period
The EVFTA Agreement will significantly reduce import taxes on Vietnam's seafood products, eliminating tariffs on raw shrimp from 12-20% to 0% upon its implementation After seven years, processed shrimp will also see a reduction to 0% import tax In contrast, major competitors like Thailand, India, Indonesia, and Ecuador face higher tax rates due to the absence of FTAs, with basic tax rates ranging from 4.2% to 12% The agreement will immediately remove tariffs on approximately 50% of tariff lines, including high-tax items such as oysters, scallops, squid, octopus, and frozen black tiger shrimp, while the remaining lines will have tax rates between 5.5% and 26%.
According to the 3-7-year roadmap, tariffs on shrimp products, pangasius, and tuna will be reduced to 0% The EU will implement tariff quotas of 11,500 tons per year for canned tuna and 500 tons per year for surimi (fish balls).
Table 2.4: Tariff reduction roadmap for some key products of Vietnam Name of product
Shrimp HS03: EIF or 3, 5-year roadmap
With the implementation of the EVFTA, the export tax on certain Vietnamese shrimp products to the EU will be reduced to approximately 0% This includes shrimp classified under HS code 03061100, such as frozen green lobster, frozen tiger shrimp (HOSO, DP), and shelled shrimp, which will see a decrease from the current tax rate of 12.5%.
The HS code 03061710 for shrimp, which includes frozen PD tiger shrimp, frozen HOSO whole tiger shrimp, frozen fresh black tiger shrimp, frozen black tiger shrimp, frozen fresh HLSO black tiger shrimp, IQF frozen black tiger shrimp, and frozen white shrimp, is currently subject to a 20% tariff.
+ After 5 years: shrimp with HS code 03061794 will be reduced to 0% from 18%;
HS16: 7 years luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
After 7 years: EU will adjust from 20% to 0% for shrimp HS code HS code 16052110 (shrimp paste) and shrimp HS code
Catfish 3-year roadmap, except smoked fish is 7 years
Tuna HS03: EIF or 3, 5, 7-year roadmap
+ The tariffs on fresh and freeze tuna products (except frozen tuna loins/fillets HS code 0304) will be remove since EVFTA comes into force
+ For frozen tuna loin/fillet products with HS code 030487, the
EU will eliminate the tax customs for Vietnam under the 3-year roadmap, from the basic tax rate of 18%;
The European Union will eliminate tariffs on steamed tuna loin and fillet products from Vietnam over a 7-year period, starting from the basic tax rate, facilitating the production of canned tuna.
HS16: TRQ with canned tuna (11,500 tons)
The European Union will grant Vietnam a tax exemption for canned and processed tuna products, including various forms of canned tuna, within a quota of 11,500 tons per year.
Squid, octopus EIF or 3-year schedule luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Other seafood TRQ with surimi (HS1604.20.05)
To benefit from the favorable tax rates outlined in the EVFTA Agreement, seafood products must meet specific origin criteria Notably, the EVFTA mandates that seafood must have a pure origin, meaning that the fishery must be born or raised in a member country of the EVFTA.
• Regulations and technical standards for seafood products entering the
However, in order to enjoy EU tariff preferences, the seafood industry needs to comply with a number of specific regulations and standards as follows:
To export seafood products to the EU market, the country of origin must be on the list of eligible countries approved by the EU, ensuring equivalence in public health and control systems Once approved, the exporting country's authorities will certify its businesses and fishing vessels, with approved exporters receiving a unique identification number.
Under the IUU Regulation, seafood products exported to the EU must be accompanied by a health certificate issued by the relevant authorities of the exporting country This certificate ensures that the health and control systems of the exporting country are equivalent to those of the EU, thereby guaranteeing compliance with EU requirements for all shipments.
Enterprises exporting seafood to the EU must adhere to food safety management systems, including ISO 9001, ISO 22000, and HACCP principles Implementing HACCP is typically the initial step toward adopting more rigorous food safety programs like FSSC 22000 or BRC.
The European Union has implemented regulations to safeguard food quality and human health by setting maximum limits for contaminants, including heavy metals and mycotoxins Specifically, EC Regulation No 1881/2006, established on December 19, 2006, outlines permissible concentrations of these contaminants in food imports Additionally, EEC Regulation No 315/93, dated February 8, 1993, establishes community procedures for managing contaminants in food.
The control of veterinary drug residues in animals is regulated in EU
Regulation No 37/2010, established on December 22, 2009, sets the maximum residue limits (MRLs) for veterinary active ingredients in food of animal origin Foods containing residues of active ingredients not listed or exceeding the permissible concentration are prohibited from entering the EU market.
Control over genetically modified (GMO) foods
EC Regulation No 1829/2003, of September 22, 2003 determines that products containing GMOs may not be placed on the market unless authorized and in compliance with labeling regulations
EU Regulation No 503/2013, dated 3 April 2013 of the EU provides an EU- wide approval application process for businesses to place GMO products on the market
Fishery products for human consumption must comply with the General Code of Food Hygiene and the sanitary specifications for food of animal origin as outlined in EC Regulations No 852/2004 and No 853/2004, effective April 29, 2004 Additionally, food preparation must adhere to specific conditions set by EEC Regulation No 89/108/EEC, dated December 21, 1988, particularly regarding trans fat content, which excludes natural trans fats found in animal fats.
53 not exceed 2 grams per 100 grams of fat according to EU Regulation No 2019/649,
Traceability, compliance and accountability in food
Food business operators must identify their nearest supplier and consignee as mandated by EC Regulation No 178/2002, effective January 28, 2002, and ensure compliance with obligations throughout all stages of production and distribution.
Seafood products must be labeled with essential information, including the product name, net weight, expiration date, storage conditions, business name, manufacturer's address, and batch mark Additionally, nutritional details such as calorie value, fat content, saturated fat, carbohydrates, sugar, protein, and salt must be included According to EU Regulation No 1379/2013, products can only be sold to consumers or suppliers if they display the scientific and commercial name of the fish, the method of capture, the catch area, defrosting status, and expiry date Furthermore, certain saltwater fish, crustaceans, and shellfish must also indicate the country of origin, scientific and commercial names, freshness, size, weight, export date, and consignor's address.
2.4.2 Forecasting the prospects and the impact of EVFTA on seafood exports to the EU
• Forecasting the prospect of increasing Vietnam's seafood export turnover to the EU
Some achievements of Vietnam’ seafood export when EVFTA comes into
In addition, according to statistics from the General Department of Customs, since the Agreement took effect in August 2020, Vietnam's seafood exports to the
In November 2020, the EU reported a total of 14.3 thousand tons valued at 64.17 million USD, reflecting a significant decline of 35.9% in volume and 41.44% in value compared to October 2020 Additionally, this marked a decrease of 2.94% in volume and 8.44% in value when compared to November 2019.
69 accounting for 7 ,91% in volume and 8.65% in value of seafood exports of the country
Figure 2.5: Vietnam's seafood exports to the EU in 2019 - 2020
Source: Calculation from data of the General Department of Customs;
Vietnam's seafood exports to the EU saw an increase following the implementation of the EVFTA; however, there was a slight decline in November and December 2020 compared to the same months in 2019 This decrease was primarily due to EU importers reducing their seafood purchases in anticipation of the holiday season, driven by concerns over the Covid-19 pandemic and the need to lower inventory costs Additionally, the volume of seafood available for export from Vietnam was limited during this period due to adverse weather conditions In the first 11 months of 2020, Vietnam exported 187.92 thousand tons of seafood to the EU, valued at 870.15 million USD, reflecting a 9.2% decrease in volume and a 6.4% decrease in value compared to the previous year, representing 10.2% of Vietnam's total seafood exports by volume and 11.32% by value.
In the first 11 months of 2020, Vietnam experienced an increase in exports of shrimp, tuna, and clams to the EU compared to the same period in 2019, while exports of pangasius, squid, octopus, and crabs saw a significant decline Specifically, shrimp exports accounted for 30.24% in volume and 54.41% in value, tuna for 13.3% in volume and 13.87% in value, pangasius for 27.41% in volume and 13.26% in value, clams for 15.3% in volume and 5.73% in value, and squid for 3.25% in volume and 3.39% in value The statistics indicate that the implementation of the EVFTA has particularly benefited shrimp, clams, tuna, and squid through favorable tax incentives.
In 2020, Vietnam's seafood exports to the EU experienced a decline, with turnover and value decreasing by 8.8% and 6.21%, respectively, totaling 205.9 thousand tons valued at 947.89 million USD This represented 10.18% of the volume and 11.29% of the value of Vietnam's total seafood exports The EU market did not exceed 1 billion USD in export value that year However, in 2021, there are promising opportunities for Vietnam's seafood exports to surpass the 1 billion USD threshold.
EU market, because Vietnamese seafood exporters will exploit more effectively the EVFTA Agreement
It is predicted that Vietnam's seafood exports to the EU in the first quarter of
In 2021, growth is expected to surpass that of 2020, largely due to the favorable effects of the EVFTA Agreement The ongoing complexities of the Covid-19 pandemic in the EU are likely to sustain existing trends in seafood consumption and imports at least until the end of the first quarter of 2021.
Table 2.5: Vietnam's seafood exports to the EU in November and 11 May 2020
0,28 0,45 178 3.897 -58,3 -21,4 luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Source: Calculation from the data of the General Department of Customs
Table 2.6: Seafood exports to EU markets in November and 11 May 2020
Belgium 15,7 14,1 10.103 122.721 1,3 3,6 luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
Source: Calculation from the data of the General Department of Customs luan van tot nghiep download luanvanfull moi nhat z z @gmail.com Luan van thac si
The number of enterprises exporting seafood to the EU increased after the EVFTA took effect
Before the implementation of the EVFTA on August 1, 2020, only 370 Vietnamese enterprises were involved in exporting seafood to the EU, with fewer than 200 participating each month Following the agreement's enactment, this number rose to over 200 enterprises per month By the end of 2020, it is estimated that 409 Vietnamese enterprises were exporting seafood to the EU, predominantly consisting of reputable companies with strong supply capabilities.
Businesses report that seafood exports to the EU market under the EVFTA face significant challenges, particularly due to the confusing implementation of documentation and certification regulations.
- C/O form Eur1: Still confused in its application in the business community and within the EU member states themselves
- C/O has been issued for a long time because it is related to the certification certification according to IUU regulations
The application of HS codes often confuses enterprises, leading to uncertainty about which code to declare This confusion can result in code declarations that are not accepted by the importing country.