EVFTA a double edged sword of challenges and benefits for agriculture sector
Friday, February 9,2018AsemconnectVietnam - The Vietnam-EU Free Trade Agreement (EVFTA) is set to come into force this year and with its benefits will also come great challenges for the future of agriculture, which has been a sensitive field for both sides during the negotiation process.
Challenge of meeting rules of origin
The livestock industry is forecast to be at the biggest disadvantage as taxes on chicken and pork will be cleared under a roadmap for 8- 10 years, while import duties on beef, milk, and dairy products will be eliminated in a shorter time within 3 years. Consequently, over the short and long terms, the animal husbandry industry will be under fierce competition with products imported from the EU.
Aside from such issues, many Vietnamese products have not yet met the necessary food hygiene and safety regulations or the technical standards of importers. For example, 323 consignments of Vietnamese seafood received warnings for breaches of food hygiene and safety regulations in the US, EU, Japan, and the Republic of Korea in the 2010-2015 period. Many shipments of pepper and fresh fruit and vegetables to the EU were cautioned for pesticide residues and food hygiene and safety violations.
Furthermore, to benefit from the trade deal’s incentives will require exports to satisfy the EU rules of origin, which presents its own challenges for several Vietnamese sectors. For instance, the EU has set rather stringent rules of origin on the cashew nut sector that depends on 63% of imported materials. To satisfy all EU regulations, Vietnam is required to use local raw material supply.
Vietnam’s imports of wood products account for 39.38% of its lumber from Laos and Cambodia, which are non-bloc members without legal certificates of origin (C/O).
Additionally, the EVFTA also stipulates detailed regulations on procedures and legally binding conditions covering the time-limit and manner in which countries must obey C/O procedures for each specific case. This is a big challenge for Vietnam as the origin traceability capacity to prove those origins remain inadequate and the necessary system for such diligence is yet to be seen.
The need for strong State support
Source: vov.vn
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