FACILITATING HAIPHONG ENTERPRISES IN EVFTA

The EU-Vietnam Free Trade Agreement (EVFTA) officially came into force from August 1, being a new-generation agreement having the ever-largest commitment coverage and level, with the EU’s elimination of 99.2% of tariff lines on the exported cargoes of Vietnam. The agreement will usher into big opportunities for Vietnamese businesses, yet challenges are huge, too, especially for small and medium enterprises in Haiphong.

EU is currently one of the largest export markets of Vietnam with the major export items as garment and textile, footwear of all types, the agro-forestry and aquaculture products. These items will be given the tax reduction of nearly 90%, many of which are absolutely imposed tax of 0% since August 1. 42.5% and 37% of tariff lines imposed on Vietnam’s garments and textiles, footwear will be abolished, respectively, and the rest will be eliminated after three to seven years. EVFTA will help the apparel and footwear sectors of Vietnam to gain more advantages in price competitiveness. This is assessed to bring about new prospects for these sectors to increase exports to EU in the context Covid-19 pandemic has interrupted the global supply chain, yet, to take advantage of EVFTA, the agreement’s C/O principles are still putting forth challenges when the materials are mainly imported.

Ms. Pham Minh Tam – Cu Bach Co.,Ltd: Besides the spearhead and potential export items of Haiphong as garment and textile, leather footwear, computers, electronic products and spare parts, mechanics, machine manufacturing, other items are indirectly benefited from EVFTA as logistics, enterprises in the field of infrastructure, real estate and industral parks. To make the most of the agreement’s advantages, the legal system, transport and logistics infrastructure will be robustly developed to adapt to higher development conditions.

Mr. Vu Duy Hung – Song Minh Co., Ltd: Vietnam is assesed to lure the shift of foreign investment capital inflow with the friendly investment environment, political stability, trustworthy economy and competence of dealing with global incidents of the Government, as well as the low-cost workforce. However, apart from the mechanisms and policies for investment attraction, foreign enterrprises are more interested in the infrastructure  and the human resourses quality to meet the enterprise’s requirements. Therefore, the shortage of labor force, including the highly-proficient laborers for hi-end industries, is emerging as the biggest hurdle among the foreign investors.

Mr. Kunihiko Tominaga – Haiphong Ojitex Co.,Ltd: (For the EU-Vietnam Free Trade Agreement, I can see that a large number of foreign enterprises are studying to invest in Vietnam in general and Haiphong in particular. I think, after the Covid-19 pandemic, the investment inflow will eye an increasing tendency, yet, we are worrying about the shortage of good-quality workforce in case of business expansion. I hope Haiphong city will further reform administrative procedures and create convenient and advanced infrastructure. With these impovements, I believe the investment in Haiphong will robustly increase in the coming time.)

Opportunities of EVFTA are clarified and the challenges are obvious also when almost enterprises in Haiphong are small and medium-sized. Without activeness in adapting to the economic waves in the integration period, opportunities will not flow into small and medium-size businesses of Haiphong, and they will be grasped by other lage-scaled and foreign enterprises instead./.