Businesses have been requested to devise concrete strategies relating to trade promotion in order to take full advantage of the opportunities on offer from the EU-Vietnam Free Trade Agreement (EVFTA)
Trade promotion activities of Vietnamese businesses at international trade fairs. (Photo: Thuong Hieu Viet magazine)
Once the EU-Vietnam Free Trade Agreement (EVFTA) comes into full effect, nearly 100 per cent of the import tariff lines that exist between the two sides will be eliminated in line with the short-term roadmap, thereby adding fresh impetus to the country’s export growth.
With regard to the advantages of trade promotion activities within the EU market, the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said once in effect, both the EVFTA and the Europe-Vietnam Investment Protection Agreement (EVIPA) will serve to open markets for both sides.
As a result, EU businesses look set to intensify investment in Vietnam, while domestic firms will also have a greater opportunity to gain access to a variety of high-quality goods, in addition to a range of advanced and hi-tech machinery and equipment from the EU.
Limited knowledge on EU regulations
Le Hoang Tai, Vietrade deputy director, said the new-generation agreements will contribute to creating an important driving force for relevant agencies and the business community to strengthen trade promotion activities for export products, especially key export items such as seafood, fruit and vegetables, processing farm produce, electronics and components, garments and textiles, leather and footwear to make inroads into the EU market.
In addition, EU nations have high levels of economic development and a high standard of infrastructure while large-scale trade promotional activities in EU countries have attracted a large number of customers from different continents to engage in transactions.
Therefore, the organisation and involvement in trade promotion activities at EU nations have created favourable conditions for participating countries to gain easier access to EU importers and consumers in addition to other markets worldwide.
Mr Tai, however, acknowledged that the EU represents a demanding market which has strict requirements in terms of product quality, food safety and hygiene, labelling, and environmental standards. Moreover, not all businesses are able to meet the stringent requirements set by EU member states.
He advised domestic businesses to make investments in developing products that meet EU standards and regulations on imported goods, as well as devising a detailed export plan that is suitable for each separate type of commodity and target market.
Vietnamese businesses could also face difficulties when engaging in trade promotion activities in the EU market such as a lack of foreign language skills and limited knowledge on regulations within the EU market.
The Vietrade representative urged businesses to enhance their competitive edge, train a highly qualified workforce with strong communication, negotiation and management skills to better manage their customers’ demand.
If domestic businesses to do well with this, they could potentially boost exports through the implementation of trade promotion activities in the EU market, contributing to the country’s overall socio-economic development, Tai noted.
What should businesses make preparations to seize opportunities from EVFTA?
Tran Thanh Hai, deputy director of the Import-Export Department under the MoIT, said when the new-generation free trade agreements such as the EVFTA become effective, they will both create a window of opportunity and pose challenges for domestic businesses.
The EVFTA will help persify markets and export commodities, especially among Vietnamese goods with highly competitive advantages. However, the trade deal will also serve to create fiercer competition within the goods and service market, particularly in the domestic market.
Consequently, businesses need to focus on improving the competitive capacity of their products, stepping up trade promotion activities by conducting market research, and evaluating partners in an effective way in order to utilize opportunities brought about by the EVFTA.
In recent years, the MoIT has always given priority to trade promotion activities to help businesses gain greater insights into market information, enhance connectivity among partners, and spur exports to the EU market.
Under the framework of the national trade promotion program, the MoIT spends an average of 20 per cent of its total funding on trade promotion activities to the EU market and pays heed to augmenting co-operation with trade offices, embassies, and trade promotion agencies of EU member states to get up-to-date information about businesses’ import-export demand.
In order to increase the efficiency of trade promotion activities, aside from support from the state, businesses, especially small and medium-sized enterprises (SMEs), should be more proactive in gaining information about the EU market by studying opportunities and challenges. In addition, they should improve product quality and design, enhance competitive advantages, increase productivity, and develop unique brands.
Greater attention should be given to applying advanced quality standard systems to meet stricter requirements of the importing countries, improving productivity towards reducing product prices, and persifying their designs and package in order to suit the tastes of consumers.