Turning challenges into opportunities

Wednesday, 2020-08-26 12:48:00
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The EU overtook the US to become the second largest export market of Vietnamese tra fish fillets since early 2019. (Illustrative image)
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NDO - Previously, China was the largest export market for Vietnamese tra fish fillets, followed by the US. However, the European Union (EU) overtook the US to become the second largest export market of Vietnamese tra fish fillets since early 2019, with annual export revenue of about US$300 million.

It can be seen that before the EU-Vietnam Free Trade Agreement (EVFTA) took effect, a number of Vietnamese exporters had been gradually affirming their position in the EU market with the increasing volume of export goods.

As the EVFTA has now officially come into effect, many new and bigger opportunities will open up for various industries, and not just for Vietnam's tra fish industry.

Besides the unprecedented large tax incentives, regulations in EVFTA also help Vietnamese enterprises avoid the risk of unfair competition by building up technical non-tariff barriers.

If enterprises can make good use of the agreement, there will be more room and potential for domestic production towards export.

However, besides the opportunities and advantages, there are also many challenges that Vietnamese enterprises must pay attention to.

It should be mentioned the language barriers, cultural differences as well as limited understanding of the regulations in the EU market are among these issues.

Successful transactions depend on many factors besides the satisfaction of the basic requirements for product quantity and quality.

These factors include websites; marketing documents on social networks; the sales team and their language ability, working style, and legal and cultural knowledge; amongst others.

These intangible factors actually play a very important role in competing with other rivals.

Most of the purchasing staff of EU businesses use English professionally as an official language. Meanwhile, Vietnamese enterprises still have many gaps to fill compared to competitors from other countries in terms of working style and dealing with European customers.

In addition, the EU market also has strict standards for requirements on quality, food hygiene and safety, labour conditions, environmental impact, and others that not all Vietnamese businesses can meet.

To enjoy tax incentives under EVFTA commitments, enterprises must meet stringent rules on the origin of raw materials for processed and manufactured products in the areas of garments, textiles, footwear, wood and others in addition to sanitary and quarantine standards for agricultural products.

However, from a business perspective, it is advisable to see the above challenges as opportunities for businesses to study and overcome in order to take advantage of the agreement.