EU Eases Warning Flags on Vietnamese Agricultural and Food Products
With the EVFTA in effect, Vietnam has essentially implemented regulations on food safety and disease safety successfully. According to the Vietnam Sanitary and Phytosanitary Notification Authority and Enquiry Point (SPS Vietnam), in October 2023, the EU issued nearly 3,900 food safety warnings for imported agricultural and food products. Of these, only 55 warnings were issued for agricultural products and food from Vietnam.
This number has decreased by about 15% compared to 2022.
Vegetables and fruits are the most warned product group with 23 cases, followed by seafood products, confectionery, and other processed products. Among these, violations due to chemical residues account for the highest number at nearly 60%.
With the EVFTA, Vietnam has essentially well-implemented regulations on food safety and disease safety.
According to regulations on food safety and disease safety, the EU conducts a biannual review of all enterprises exporting agricultural and food products. If compliance with regulations is satisfactory, the EU will decrease inspection frequency and streamline regulations and procedures for imported Vietnamese agricultural and food products.
In case of non-compliance, the EU may consider increasing the frequency of inspections, regulations, and procedures for imported Vietnamese agricultural and food products.
The Ministry of Agriculture and Rural Development reports that Vietnam's agricultural exports to the EU market have witnessed robust growth, particularly since the EVFTA came into effect in August 2020. In 2020, exports amounted to $3.07 billion; in 2021, it reached $3.236 billion, and in 2022, it rose to $4.934 billion.
However, non-tariff measures such as animal and plant quarantine (SPS) or technical barriers to trade from the EU side have posed numerous challenges for Vietnamese agricultural products exported to the EU. Notably, the European Parliament (EP) has passed a new law prohibiting the import of goods associated with deforestation.
Each year, the EU imports over 160 billion USD worth of agricultural products, but only about 4% of that total comes from Vietnam. This indicates that the value and export turnover of Vietnam's agricultural products to the EU remain relatively low compared to both Vietnam's export potential and the EU's import demand.
Given Vietnam's strength as a nation with a long-standing tradition of agricultural development and a reputation for numerous outstanding agricultural products, there is a need for Vietnamese goods to focus on improving the quality of products that are currently strong in meeting customer needs. Meeting strict EU standards is crucial, thereby establishing a foundation for increasing the overall output of agricultural products and diversifying the range of export products.
In the first 10 months of 2023, the total export turnover of the entire agricultural sector reached 43.08 billion USD. Exports to Asia amounted to 21.13 billion USD, showing an increase of 5.7%. Exports to the Americas was 9.74 billion USD, marking a decrease of 20.6%. Exports to Europe was 4.5 billion USD, representing a decline of 11.8%. Africa saw an increase to 910 million USD, up by 21.6%, while Oceania witnessed a decrease to 641 million USD, down by 17.2%.
The EVFTA (European-Vietnam Free Trade Agreement) is the free trade agreement between the European Union and Vietnam, officially taking effect from August 1, 2020. This agreement opens up new opportunities and prospects for the comprehensive cooperative partnership between Vietnam and the European Union (EU).
The EVFTA comprises 17 chapters outlining agreements between Vietnam and the EU. Notably, Chapter 13 is specifically dedicated to Trade and Sustainable Development (from Article 13.1 to Article 13.17). The objective of this chapter is to promote sustainable development, recognizing contributions through enhancing the role of trade and investment in addressing labor and environmental issues. Commitments and obligations related to the environment in the EVFTA are designed to strengthen the coherence between trade and environmental policies, ensuring that trade and investment activities do not have negative impacts on environmental protection requirements.
According to a survey conducted by VCCI, the EVFTA is the Free Trade Agreement most widely known among Vietnamese businesses. It also has the highest awareness rate, with nearly 94% of businesses having heard about or being familiar with the agreement to varying degrees. This is the highest awareness rate among all the FTAs currently in effect. This indicates that the EVFTA has a significant and profound impact on the interests of many Vietnamese businesses. It contributes to enhancing awareness among businesses regarding environmental protection issues during the implementation of economic and social development activities. It also promotes the synchronized and more effective implementation of environmental protection requirements, ensuring sustainable development.
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