EVFTA brings chances and challenges to local agricultural production

Rice is loaded at Saigon Port in HCM City (Source: VNA)

The new trade agreement between Vietnam and the European Union opens many doors for agriculture, according to experts.

Nguyen Do Anh Tuan, Director of the Department of International Cooperation, Ministry of Agriculture and Rural Development said the newly-ratified EU-Vietnam Free Trade Agreement (EVFTA) offers plenty of opportunities.

He said as the EU imports about 150 billion USD agricultural products each year so the EVFTA would open up a potential market for the local export agricultural products.

Tuan told a discussion hosted by the Government Electronic Portal on the EVFTA in Hanoi on February 14 that: “There is room for Vietnamese agricultural products.”

Agreeing with Tuan, Chairman of Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said: “The EU is a large market with the world's leading purchasing powers and the EVFTA Agreement marks a new phase for Vietnam with favourable conditions for the local enterprises, including the agriculture firms, to increase exports.”

However, Luong Hoang Thai, Director General of the Multilateral Trade Policy Department, under the Ministry of Trade and Industry raised a number of challenges for the industry as the strict conditions from the EU market such as the regulation of origin, quality and labour relating to the agriculture production.

Thai added: “Local livestock industry would face increasing competitive pressure from imported products from the EU.”

He thought the small scale of the husbandry would make farmers and local livestock cooperatives fall behind imported products from EU. 

As frozen pork meat would be duty-free after seven years, dairy products after five years, and processed food after seven years, and chicken after 10 years, Thai said: “Vietnam should take time to improve the local livestock.”

Currently the EU’s livestock products exported to Vietnam are subject to tariffs of 10-40 percent. The reduction of import tariff on livestock products from the EU will improve their penetration of the Vietnamese market and pose significant competition to domestic products.

Thai added the country should apply further modern technology to ensure clean production as well as avoid child labour in the production to improve agriculture production to better grasp the chance from the EVFTA./.

VNA