Vietnam at the gate of EU with EVFTA “ticket” on hand: chance or challenge?
Right after the EVFTA was ratified on 12th Feb 2020, 99% of tariff and commercial bariers were removed. It is expected that the movement of cargo both ways will be soon flowed rapidly. Just for agricultual products, Vietnam hope to get over 1 million USD more per year over the current 5 million USD level on total 150 milliion USD annually for such demand. The same opportunities for other industries like garment and footwear to export to such potential market of average income at 90,000 USD per person annually. This open a new door for Vietnam trades in the serious affection by Covid-19 (nCoV) to reduce trading demand with China, Taiwan or may be Japan, South Korea, esp. for raw materials and agri-products.
However, the products come in this market require very high quality under strict control of EU. So, Vietnam companies must be very carefully of issues like children workers not allowed, no chemical residues in seafood products, sustainable resource protecion, and so on. Therefore, Vietnam companies must pay attention to process improvement, develop technology, and longterm reputation of the supply. Another challenge to overcome to Vietnam factories is regulation of cargo origin where most of raw materials are imported from China and ASEAN, not from EU.
To take this opportunity and overcome challenges, both Government and companies must go hand-in-hand to build up long term quality human resource, good infrastructure an policies, professional business.