On the 29th of August in the SECC, EuroCham and OXFAM, together with other partners, co-hosted a conference to discuss the opportunities and challenges emerging from the EU-Vietnam Free Trade Agreement (“EVFTA”) for Vietnam’s shrimp industry. The EVFTA, as one of the most comprehensive agreements, can be seen as an expressway to connect Vietnam with one of the world’s top economic and technological centers so that the country can boost exports and modernise its agriculture industry.
According to Ms. Trinh Thi Thu Hien - Head of Import-Export Department, Ministry of Industry and Trade – in comparison with some competitors, Vietnam has more advantages in shrimp exports to the EU. However, the greatest challenge is that most local producers are only able to run small shrimp farms, whereas the European Union’s demand for shrimp exports require stringent hygiene standards and traceability certificates, creating high costs for these producers. To meet these standards, Mr. Luc from Sao Ta Food JSC remarked “Breeding farms must have sufficient financial resources to meet the required investment, and their farming scale must be quite large to share the additional costs”.
On behalf of EuroCham, Vice-Chairman Jean-Jacques Bouflet joined the panel discussion. He affirmed that EuroCham currently has over 1000 members, many of whom are representatives of EU shrimp buyers. He expected that the EVFTA would be ratified early next year or by mid-2020 at the latest. He also stated that after the EVFTA comes into effect, Most Favoured Nation (“MFN”) tariffs will automatically replace the Generalised System of Preferences (“GSP”) rates which the EU has applied for developing countries. This is such a precious opportunity for shrimp farmers, but there is also a big challenge regarding stringent requirements from the EU such as food safety and hygiene, standards on labour and working environment and the goods origin. To tackle these challenges, there is no way better than improving aquaculture product quality to match with technical standards. Although the process of improvement is not easy, the favourable outcomes will be worth the investment.
Regarding advanced technology, farmers should also take note of the sustainability and environmental protection. At EuroCham, our Sector Committee on Food, Agri and Aqua Business also works on smart agriculture and traceability solutions, conducting laboratory tests and certifying products.
From the view of an international buyer, Mr. Vincent Gothknecht - Chief Representative at I. Schroeder KG - also stated that the waiting time until the EVFTA is ratified is necessary for Vietnam to enhance product quality and gain certificates of origin. He also stated that European buyers have been skeptical about Vietnamese goods due to incorrect reports. Therefore, Vietnam needs to re-gain the trust of international customers and demonstrate its commitment to trade high-quality products.
The only way to grant Vietnam an entry ticket to penetrate the European retail market is the certificate of origin. If products come from Vietnam without a certificate, European traders cannot purchase them. We are also actively working with VASEP and EuroCham to get updated information as well as make field trips to local areas to better understand the Vietnamese market and help facilitate trading.