In the context of high inflation in many countries, FTAs are a favorable factor to help businesses increase exports. However, a representative of seafood exporters said that it is necessary to remove obstacles to rules of origin so that enterprises can take full advantage of the FTAs.

 

Making good use of FTAs for export

 

In the group of agricultural, forestry and fishery products, seafood products have a high rate of using preferential C/O when exporting to markets with FTAs, because this is the product that best meets the processing and packaging standards of the import market. Due to the completeness of the product, these items penetrate well into the high-end markets.

 

According to Mr. Ho Quoc Luc, Chairman of the Board of Directors of Sao Ta Food Joint Stock Company, Vietnamese businesses have been flexible and agile in finding markets, as well as taking advantage of FTAs. Especially, the EU-Vietnam Free Trade Agreement (EVFTA), has the greatest stimulating effect, increasing Vietnam's export sales.

 

Enterprises tend to export to the EU more and more. Along with that, the Free Trade Agreement between Vietnam and the United Kingdom of Great Britain and Northern Ireland (UKVFTA) has created a new growth engine for Vietnam's seafood products with trade advantages and tax incentives. The deal opens up many opportunities to promote exports for a series of billion-dollar Vietnamese exports to the potential UK market.

 

According to the Vietnam Association of Seafood Exporters and Producers, demand in the EU recovered after the Covid-19 pandemic, and high food inflation, so despite difficulties such as soaring sea freight rates and high container costs, Vietnamese enterprises take advantage of promoting seafood exports to this market. In particular, in the context of high inflation, the EVFTA is an even more favorable factor to help exports to the EU prosper. Seafood exports to the EU in the first five months of 2022 also grew by 45%, reaching nearly US$562 million.

 

More than 80% of tuna raw materials have not taken advantage of the FTA

 

In addition to making good use of FTAs ​​when exporting seafood to other markets, according to the Vietnam Association of Seafood Exporters and Producers, more than 80% of processed tuna materials for export enterprises must be imported from countries and territories that do not have FTAs ​​with Vietnam. Therefore, businesses cannot take advantage of the FTA to increase their competitiveness compared to other exporting countries.

 

According to Mr. Truong Dinh Hoe, current obstacles and difficulties in the process of implementing and applying the rules of origin of goods are that currently the rules of origin in FTAs ​​mostly require raw materials used for processing and exports must be of pure origin (i.e. materials of domestic origin) or of intra-regional origin (materials originating from FTA member countries).

 

Facing the above difficulties and problems of seafood enterprises, at the end of June 2022, VASEP sent an official dispatch to the Import-Export Department (Ministry of Industry and Trade) proposing a number of contents on rules of origin in the process of implementation and application of the rules of origin.

 

According to VASEP, if the problem is solved, it will help seafood businesses, especially tuna businesses, to take full advantage of the FTAs.

 

VASEP proposes that the Import-Export Department consider including the content expected to be discussed at FTAs ​​in the near future on the rules of origin during the implementation process, applying the rules of origin as follows: Regarding the export certification mechanism origin, it is necessary to move to a mechanism that allows enterprises to self-certify their origin to reduce administrative procedures and enhance responsibility for businesses.

 

Regarding the form of certification of origin: soon deploy electronic certificates of origin, including certificates of origin certified by enterprises themselves on the common electronic system through digital signatures of enterprises. Regulations on the origin of goods, expanding the criteria of origin of goods so that enterprises can use materials imported from countries outside the FTA bloc for production and export to countries in the FTA bloc. Criteria of origin in the list of Product Specific Rules (PSR): It is necessary to expand the HS code conversion criteria.

 

Source: Customs News