ONE MONTH AFTER EVFTA COME INTO EFFECT, FISHERY EXPORT TO EU INCREASES
One month after the EVFTA Agreement took effect, in August 2020, the total value of seafood exports to the EU reached nearly 98 million USD, a slight increase of 1% over the same period in 2019. Seafood export results in this country This has clearly reflected the positive impact of the EVFTA agreement in promoting exports of seafood products with 0% tax incentives from the date the agreement comes into effect: shrimp, squid, and octopus all increase compared to the same period and July before EVFTA took effect. This shows that enterprises have promptly grasped and applied the incentives of the agreement, although initially implementing the confusion of procedures such as HS code declaration, declaration form of EUR1 certificate of origin, and other regulations ...
The most positive and obvious changes are shrimp and squid and octopus, of which shrimp increased by nearly 16% over the same period in 2019, up nearly 9% compared to July 2020; squid and octopus increased by 10% over the same period in 2019 and nearly 24% compared to July 2020.
Pangasius exports recovered 4% compared to July but still decreased by nearly 24% compared to the same period in 2019. Tuna exports after increasing 65% in July, to August decreased 17% compared to the same period in 2019 and decreased. 28% compared to July 2020. Export of other seafood products is similar to the trend of tuna: down 25% over the same period and 14% lower than in July 2020.
Exporting to EU in the first 8 months of 2020
Total exports reached over 600 million USD, down by over 13% over the same period in 2019. In which, shrimp still decreased by 2% over the same period last year, pangasius decreased 34%, tuna 9%, squid, white octopus decreased 37%, other seafood decreased 14%.
Shrimp accounts for 52% of seafood exports to the EU, with the growth rate after EVFTA, is expected to account for a higher proportion in the coming months. Pangasius accounts for 15%, tuna has 14% - these 2 products have no prospect of recovery in the last months of the year. Octopus squid accounts for 5%, and other seafood 14%. It is forecasted that squid and octopus will increase by 10-15% in the last months of the year and the growth will depend on domestic exploited raw materials.
EVFTA is a good opportunity for Vietnamese seafood to increase exports and compete in the EU
The EVFTA Agreement took effect from 1 August 2020. 220 seafood items have the base tax rate of 0-22%, of which the high tax rate from 6-22% will be 0% from 1 August. In particular, some processed products that have a high basic tax rate (20%) will be immediately reduced to 0% such as oysters, scallops, squid, octopus, clam, oysters, processed abalone ...
For canned tuna and fish balls, the EU gives Vietnam the tariff quotas of 11,500 tons and 500 tons, respectively. In addition, most frozen squid and octopus products have a basic tax rate of 6-8% and will be reduced to 0%, other products such as surimi will be reduced from 14.2% to 0%, fish chess from 7.5% to 0%.
Frozen black tiger shrimp and white leg shrimp products (HS code 03061792) will be reduced from the current 4.2% (GSP tax) to 0% from 1 August 2020. Other shrimp products according to the 3-5 year roadmap, for processed shrimp, the tax will be reduced from 7% (GSP) to 0% after 7 years.
For frozen pangasius products, the tax reduction schedule is from 5.5% to 0% after 3 years, only for smoked fish, the 7-year roadmap.
Frozen tuna products are entitled to a tax reduction of 0% immediately, except for frozen tuna loin (loin), which takes 7 years.
Competitive advantages with other countries
Even this year, frozen black tiger shrimp and whiteleg shrimp exported to the EU are entitled to 0% tax, which has brought a great advantage to the shrimp industry because of the HS03 shrimp product currently accounts for about 30% of the export value of aquatic products. products of Vietnam, 55% of shrimp export value with values ranging from 300 to 500 million USD / year. A clear advantage for Vietnamese exporters to negotiate with EU importers when compared to shrimp of the same type from Thailand is subject to a base tax of 12%, India is subject to GSP 4.2%, Indonesia is subject to GSP4.2 tax. %. Thanks to the tax advantage of Vietnamese shrimp being better than its competitors, EU importers also look for more sources from Vietnam. Deeply processed, packaged, ready-to-eat items for home consumption are still popular.
For tuna products, Vietnam will have a better chance after 3 - 7 years of tax to 0%, increasing competitiveness with the biggest competitor, Thailand, which is subject to 18% - 24% tax.
However, in order to take advantage of tariff preferences, the seafood industry needs to have a stable source of raw materials, with food safety and food quality that meets the EU market's standards and regulations. The important thing is that businesses know how to take advantage of the agreement's rules of origin effectively and flexibly.
In addition, businesses need to pay special attention to implementing and meeting the regulations and standards of labor and environment in the agreement, issues related to sustainable development. Fishery labor, especially child labor, is an issue of particular concern in the EU and other countries in recent times.
Some problems of seafood enterprises in the first month of EVFTA implementation
- C / O form Eur1: still confused in the application in the business community and within the EU member states.
- C / O is long issued because it relates to certification according to IUU regulations
- Applying HS code: enterprises are confused, do not know what code to declare / code according to the agreement is not accepted by the importing country
However, VASEP highly appreciates the companionship and support of the Ministry of Industry and Trade and VCCI, the flexibility of businesses in solving problems (C / O form Eur1), and providing information/guidance to businesses (issue booklet, workshop organization ...).
Source: Le Hang - vasep.com.vn