Barriers against exports to EU
2010 may be a successful year for Vietnamese export businesses as the world economy has shown signs of bouncing back. However, they have to overcome trade barriers, especially the law suits on anti-dumping and anti-subsidy in the European Union (EU), the second largest export market after the US, earning an annual revenue of nearly Euro 8 billion.
Many of the country’s key export items have been traded in the market including food, footwear, garments and textiles and furniture. Despite the large trade surplus and the rapid growth of export value to the EU over the past 20 years, trade barriers have greatly slowed down the development rate and caused critical problems for export businesses.
The European Chamber of Commerce (EuroCham) is making concerted efforts to cooperate with Vietnamese departments, organizations and associations to help the country’s businesses be better aware and capable of removing with these trade barriers under its sub-projects to improve the capacity of commercial policies for business associations in Vietnam.
Hans Farnhammer, First Secretary of the EU Delegation to Vietnam said that the nations’ businesses need to meet all the requirements of the trade barriers if they want to maintain the export growth rate to the market including the Sanitary and Phytosanitary Measures Agreement (SPS), dealing with packaging and product quality standards, the Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), restricting some specific chemicals used in food processing and garment and textile production that can cause cancer and meeting the EU standards onsome kinds of toys to ensure the health for children and especially the Forest Law Enforcement, Governance and Trade (FLEGT) certificates of saved chemical residue in preserving furniture.
There are about 13 cases of Vietnamese products, including furniture, motorbikes, textiles and garments and toys, that did not meet basic technical requirements when shipping their products to EU in the 2005-2008 period.
According to Farnhammer, businesses exporting products to the EU should be aware that the importing countries will gradually raise their criteria and create more trade barriers. They should establish an EU early warning system for non-agricultural products to provide businesses with adequate knowledge on the trade barriers or face a reduction in Vietnamese products’ competitiveness in export markets and hinder their chance to enter new EU markets.
Tran Huu Huynh, Head of the Legal Department under the Vietnam Chamber of Commerce and Trade (VCCI) and General Secretary of the Vietnam International Arbitration Centre (VIAC) said that the businesses’ major challenges and opportunities this year will be the EU trade barriers and the implementation of a free trade agreement (FTA).
While the anti-dumping and anti-subsidy law suits on fish, shrimp, plastic bags, footwear, bicycles and compact lamps in the two largest export markets, namely the US and the EU, continue, there are new warnings for other cases related to aquatic products and furniture.
The country’s ministries and departments should get involved in these cases, Huynh said, adding that Vietnam should establish an early warning system to help businesses and associations access the latest information on their export markets. The country should improve the capacity of lobbying in the markets that are likely to impose anti-dumping measures.
According to Phan The Rue, Former Deputy Minister of Industry and Trade, the country’s economic structure should be changed to empower its export capacity and deal with the trade barriers. Changes should be made in the processing industry as it heavily depends on imported materials. Therefore, we should develop the subsidiary industry.
Deputy President of the Ho Chi Minh City’s Young Business Association said that in recent years, his association has advised member businesses to visit and study the foreign countries and updated them with latest information from the Eurocham.
The European Committee (EC) in Vietnam also announced that the European Commercial Information Centre will officially launch later this month in Ho Chi Minh City to provide information on European law in EC’s 23 official languages to business in the city and surrounding areas.
