The domestic shrimp industry considers the EU-Vietnam free trade agreement (EVFTA) a good chance to boost exports to the EU market, according to the Vietnam Association Seafood Exporters and Producers (VASEP). Especially, tariffs on frozen prawn exported from Vietnam to the EU will fall from 20 per cent at present to zero as soon as the agreement comes into effect.
The tariffs for other shrimp products are reduced according to the 3-5 year roadmap, while processed shrimp products will have a seven-year tariff reduction schedule, excluding canned tuna and fish balls with a tariff quota of 11,500 tonnes each, VASEP said. The EVFTA will contribute to helping Vietnam’s shrimp exports to the EU increase by 4-6 per cent this year, according to the association’s forecast.
Now, the EU mainly imports frozen raw shrimp and processed shrimp from Vietnam with the Generalized System of Preferences (GSP) tariffs at 4.2 per cent and 7 per cent, respectively. With those tariffs, Vietnam has had an advantage over the two rival countries, Thailand and China, because these two countries are not entitled to the EU’s GSP tariffs.
In the first five months of this year, Vietnam’s shrimp exports to the EU reached USD243.4 million, down 26.3 per cent compared to the same period in 2018. The EVFTA also helps Vietnamese seafood exporters have more chances to take services relating to production such as logistics, insurance and finance. Therefore, they could reduce production costs and increase competitiveness compared to competitors not having FTAs with the EU, such as India, Thailand and China. The local exports will also have the opportunity to participate in the European region’s supply chain thanks to moving investment of multinational corporations to Vietnam.
However, there still are many challenges for Vietnam’s fisheries sector when participating in the EVFTA, such as technical barriers, quality standards and strict rules of origin. In addition, labour rules under the agreement will be stricter, requiring local businesses to adapt to the agreement’s requirements.