16/07/2020 09:45 GMT+7 Email Print Like 0

EVFTA: Opportunities for seafood sector

The EU-Vietnam Free Trade Agreement (EVFTA), which has recently been ratified by the Vietnamese National Assembly, is considered a great opportunity for exporters, especially seafood enterprises.
"Joining new FTAs such as the EVFTA gives many opportunities for export sectors including the seafood industry, especially opportunities from import and export tariffs,” said the Vietnam Association of Seafood Exporters and Producers (VASEP).

When the EVFTA takes effect, almost 50% of tax lines with base tax rates from 0-22% (most of the rates of 6-22%) will be reduced to 0% (approximately 840 tariff lines). Roughly 50% of the remaining tax lines with base tax rates from 5.5-26% will be cut to 0% over the next 3-7 years.


Some processed seafood products with high rates of 20% will be slashed to 0% right after the implementation of the agreement. These include oysters, scallops, clams, squid, octopus and processed abalone. In addition, frozen squid and octopus with tax rates of 6-8% will be cut to 0%. Frozen tuna will benefit the tax reduction of 0% right way; except for frozen tuna loins that need a 7-year roadmap. Canned tuna products enjoy a tax rate of 0% with the tariff quota for Vietnam at 11,500 tons.
 

A tuna fleet in the fishing grounds of the  Hoang Sa and Truong Sa archipelagos. Photo: VNP 
 

A fishing boat with Ly Son fishermen in Quang Ngai. Photo: VNP 


 Fishermen in Thanh Hoa build large capacity boats to catch tuna for export. Photo: VNP 


Since 2017, Lenger Seafoods Vietnam in An Xa industrial cluster, Nam Dinh province has exported oysters
to the European market, opening a big opportunity for oyster farmers in Nam Dinh and neighboring areas. Photo: VNP 


Tuna is an export staple to the EU in Quang Ngai province. Photo: VNP
 

The brand name “Nam Can-Ca Mau Crab” will see export opportunities to the European market right after EVFTA takes effect. Photo: VNP  

A processing line of shrimp exported to the EU at Minh Phu Seafood Corporation. Photo: VNP 

For two key products of shrimp and catfish, tax rates on frozen shrimp and tiger shrimp (HS code 03061792) products will also be truncated to 0% from 20%. The tax reductions applied on other types of shrimp products will follow a 3-5-year roadmap while processed shrimp will follow a 7-year roadmap. Catfish products have a 3-year tax reduction roadmap, but smoked fish must wait for 7 years to reach the 0% tax reduction.

The EU is the second largest seafood export market of Vietnam after the US, accounting for over 17%-18% of the total seafood export value of Vietnam. The EU market accounts for 22% of Vietnam’s shrimp exports; 11%, for Tra catfish (pangasius) exports; and 30-35%, for other seafood products.


Besides the benefits from tax reduction, through the EVFTA, Vietnamese seafood is expected to expand its export markets and increase its competitiveness compared to other regional competitors such as Thailand and India. The agreement is also an opportunity for Vietnam to attract foreign direct investment, enhance production technology and product quality and ensure a stable and transparent business environment and institutions (thanks to improved regulations and policies in accordance with FTA provisions).

Over the past 20 years, Vietnam’s seafood exports have grown on average 13%/year, from over 600 million US dollars to nearly 9 billion US dollars. Seafood is one of leading sectors in international integration. Its products have been exported to 160 markets around the world with a strong increase in export staples such as shrimp (3.5-4 billion US dollars/year), Tra catfish (1.8-2.2 billion US dollars/year), tuna and octopus (1-1.2 billion US dollars/year) and other marine products (1.2-1.5 billion US dollars).

However, Vietnam's seafood sector also faces a lot of challenges when joining the EVFTA. Seafood enterprises need to grasp and apply flexibly and honestly the rules of origin in FTAs (noting that the goods must meet the rules of origin specified separately for each FTA) and take advantage of import and export duties

 
Together with WTO accession, Vietnam has joined 16 FTAs with other countries, 11 of which took effect, with seafood exported under these agreements accounting for 55% of Vietnam’s seafood exports. This has largely enhanced the brand of Vietnamese aquatic products which have now been exported to 160 markets around the world.
 
By VNP