Vietnam-UAE Comprehensive Economic Partnership Agreement (CEPA) is creating more advantages for Vietnamese fruits and vegetables in the Middle Eastern market. However, from tariff preferences to ability to expand market share, there are still many obstacles, especially transportation costs, post-harvest preservation and access to distribution systems. This requires businesses to proactively improve their competitiveness to more effectively exploit opportunities from the Agreement.
CEPA creates new advantages for Vietnamese fruits and vegetables in the UAE
One of notable opportunities from CEPA is the UAE's commitment to eliminate import duties on most tariff lines according to a schedule. In particular, many fresh and processed Vietnamese fruits and vegetables, which are currently subject to a 5% import tax, have opportunity to benefit from a 0% tax rate if they meet preferential conditions.
Products such as dragon fruit, seedless lemons, pomelo, longan and coconut are expected to gain a competitive price advantage compared to goods from countries that do not have a free trade agreement with UAE.
Beyond being a consumer market, UAE also plays a crucial role as a trade and re-export center in the Middle East region. Dubai is considered a gateway for goods to access countries in Gulf Cooperation Council (GCC) such as Saudi Arabia, Qatar, Kuwait and Oman.
Furthermore, desert climate makes UAE heavily dependent on imported food, with approximately 85-90% of its consumption needs met. This presents a significant opportunity for Vietnamese tropical fruit products.
Speaking with a reporter from Industry and Trade Newspaper, Mr. Dang Phuc Nguyen, General Secretary of Vietnam Fruit and Vegetable Association, stated that CEPA creates tariff advantages, helping Vietnamese fruits and vegetables improve their competitiveness in UAE, while also opening up opportunities to access other markets in the region.
In fact, some businesses have proactively exploited rules of origin preferences for advantageous products such as seedless lemons, dragon fruit, bananas and diamond-cut Siamese coconuts. These products are already available in major retail systems such as Lulu Hypermarket, Carrefour and Choithrams.
Although some businesses have proactively exploited advantages of CEPA, in reality, utilization of the Agreement's preferences is still mainly concentrated among large, experienced export businesses, while many small and medium-sized enterprises still face difficulties in accessing market.
"Utilization rate remains largely limited to large and established export businesses; small and medium-sized enterprises (SMEs) are still struggling with regulations on electronic certificates of origin or lack market information to directly access local distributors", Mr. Dang Phuc Nguyen commented.
Besides limitations in market access, logistics costs are one of major obstacles for Vietnamese fruits and vegetables when exporting to UAE.
According to Vietnam Fruit and Vegetable Association, sea freight from Vietnam to Jebel Ali port in Dubai typically takes 14-22 days. For fresh fruits and vegetables, if preservation technology does not meet requirements or temperature and humidity in refrigerated containers are not maintained stably, product quality may deteriorate upon arrival at importing market.
Meanwhile, air freight, while shortening the time, is expensive, directly impacting profitability and price competitiveness.
Pressure intensifies as Vietnamese fruits and vegetables compete with supplies from India, Pakistan, Iran, Egypt and Thailand. Some countries have advantage of geographical proximity, while Thailand has built a trade promotion system and supply chain in Dubai for many years.
Besides price, quality requirements are also a significant challenge. UAE strictly controls pesticide residues, microorganisms and product labeling. For processed products requiring Halal certification, businesses need to meet certification requirements recognized by UAE market.
Therefore, tariff advantages are only initial condition. To increase market share, Vietnamese fruits and vegetables must simultaneously address issues of quality, cost and competitiveness with established suppliers in this market.
Enhancing competitiveness and expanding marketshare in the Middle East
To effectively leverage CEPA, Vietnam's fruit and vegetable industry needs to shift from primarily utilizing tariff preferences to improving its capacity to meet market demands, especially in preservation, logistics and distribution.
According to Mr. Dang Phuc Nguyen, businesses should prioritize investment in post-harvest technologies such as irradiation, steam heat treatment, biodegradable film packaging and modified atmosphere packaging, aiming to extend shelf life of fruits transported by sea to 30-45 days.
Improving preservation capabilities not only limits quality losses but also allows businesses to be more proactive in choosing transportation methods, reducing dependence on expensive air freight.
In addition, businesses need to coordinate with shipping companies and freight forwarders to optimize the transportation route to Jebel Ali port, thereby reducing logistics costs.
Another important requirement is standardizing quality right from the source of raw materials. Expanding cultivation areas, establishing packaging facilities that meet GlobalG.A.P standards and perfecting the traceability system will help businesses be more proactive in meeting importer requirements.
For processed fruits and vegetables, businesses need to understand Halal requirements applicable to each product group, select appropriate certification bodies and ensure compliance with food safety and labeling regulations.
However, improving product quality only solves part of the problem. To better exploit market potential, businesses need to change their approach to importers and retail systems in UAE.
Mr. Dang Phuc Nguyen emphasized: “Instead of relying on intermediaries, businesses and associations need to strengthen their presence at specialized trade fairs such as Gulfood Dubai and WOP Dubai to directly seek partners. At the same time, they should research models for establishing joint distribution centers, bonded cold storage facilities, or representative offices in Dubai, thereby proactively accessing large retail systems like Lulu and Spinneys”.
This is considered a necessary direction for businesses to be more proactive in organizing distribution, maintaining a stable supply and building long-term cooperative relationships with importers.
Besides production and market issues, risk management in international payments also needs attention. Some importers in UAE tend to use deferred payment or consignment methods, which poses a risk of outstanding debts and delayed payments.
To mitigate risks, Mr. Dang Phuc Nguyen recommends that businesses prioritize secure payment methods such as wire transfers with deposits or irrevocable letters of credit, and immediate payment at reputable banks. At the same time, it is necessary to carefully verify legal capacity and reputation of partners, possibly through support of Vietnamese Trade Office in the UAE, before signing large orders.
It is clear that CEPA is opening up more opportunities for Vietnamese fruits and vegetables in the UAE, but ability to translate preferential treatment into export growth depends on actual capacity of businesses. Only when limitations in preservation, logistics, quality standards and distribution systems are gradually removed can Vietnamese fruit and vegetable industry more effectively exploit UAE market and leverage the country's role as a transit hub to expand its presence in the Middle East region.

Source: Vitic/ congthuong.vn