Mr. Nguyen Do Anh Tuan, Director of the Department of International Cooperation (MARD), said that the agricultural sector will have many advantages when EVFTA enteres into force.

According to Mr. Nguyen Do Anh Tuan, the new generation of free trade agreements (FTAs) with higher and broader commitments will open up great opportunities for the whole sector. With the EU - Vietnam Free Trade Agreement (EVFTA), the EU is a big market, with the fourth-largest GDP in the world.

EU imports about USD 150 billion per year of agricultural products. Meanwhile, Vietnam has a great potential for agriculture, Vietnam's agricultural product exports of only about USD 40 billion each year, while the EU market has reached over USD 5 billion, showing that Vietnam still has plenty of room to export agricultural products to this market.

Notably, in the FTAs to which Vietnam is a party, the EU is the first economy to commit to reducing taxes on processed agricultural products. Experts say that this is a good opportunity for Vietnam's processed agricultural products when Vietnam brings goods to this market.

Estimates by several research groups show that when EVFTA enteres into force, Vietnam’s agricultural exports to the EU can increase by over USD 1 billion every year, helping agricultural GDP increase by 0.4-0.5 percent. However, EVFTA is also said to pose many challenges to the small and scattered agricultural production of Vietnam.

Mr. Nguyen Do Anh Tuan said that EU standards are very strict. For example: organizations wanting to export wood products to the EU must obtain sustainability certification, antibiotic residues must not be present in exported seafood, etc.

Also according to Mr. Nguyen Do Anh Tuan, to overcome this barrier, the agricultural sector needs to reorganize production, transform models of agricultural production, and attract attract businesses to invest in agricultural production chains.

Over the past 3-4 years, the number of businesses investing in agriculture has tripled with 12,851 businesses, having built about 1,400 safe agricultural production chains. In addition, over the past two years, there have been 30 projects of enterprises invested in processing with total capital of more than USD 1.5 billion.

In contrast, several agricultural products are also subject to competitive pressure, such as livestock products. EU has strengths in beef and pork production. Preliminary calculations show that the amount of meat imported from the EU to Vietnam following the EVFTA would increase by 5.8 percent. Some other products such as sugar cane and temperate vegetables are also facing high competition pressure.

According to Mr. Luong Hoang Thai, Director of Multilateral Trade Policy Department (Ministry of Industry and Trade), joining new generation FTAs with large markets and high competitiveness, some industries have to compete, in which agricultural sector will transition more slowly, therefore it is of special interest.
A representative of the Ministry of Industry and Trade said that in order to overcome market challenges and take advantage of opportunities, products must improve in quality, technical standards, thereby helping small businesses participate in the global supply chain to overcome this challenge.

A representative of the Ministry of Agriculture and Rural Development said that, in order to take full advantage of EVFTA, the agricultural sector will continue to strengthen and develop large-scale cooperatives with better efficiency; strengthen the communications about EVFTA with communication and advocacy programs so that the whole sector can effectively take advantages of the agreement.
 

Kylie Nguyen