Vietnam has many more opportunities to increase export of fruits and vegetables to the European Union - the world's largest market, thanks to tariff incentives brought by the EU-Vietnam Free Trade Agreement (EVFTA), according to analysts.
Before the EVFTA took effect, Vietnam’s vegetables and fruits exported to the EU market enjoyed preferential tax rates under the Generalised System of Preferences (GSP), but still at a relatively high level of 10-20 percent.
However, after this agreement came into effect, the EU offers a substantial reduction of about 94 percent out of the total 547 tax lines on fresh and processed vegetables and fruits, including those of Vietnam's strength.
This brings about a huge advantage for Vietnam to compete against agricultural products of other Asian countries, especially Thailand and China that do not have FTAs with the EU.
Data from the General Department of Customs show Vietnam’s vegetable and fruit export turnover to Europe in 2023 hit 303 million USD, up 17.4 percent year-on-year.
After the period of isolation and social distance due to the COVID-19 pandemic, the demand for foods, especially vegetable and fruit products, in EU countries was on the rise. Notably, the demand for novel tropical fruits and vegetables increased from 15-20 percent for fresh products and over 30 percent for processed products.
Experts said that Vietnam's vegetable and fruit market share in the EU remains low, at less than 1 percent of the demand of the European market.
Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), attributed the situation to structural imbalance between commodities, instability of output and quality, and barriers related technical standards.
To support Vietnamese businesses in increasing the shipments of spice, vegetable and fruit products to the EU market, Oxfam in Vietnam and the VCCI developed the project “Enhancing the Export Competitiveness of Vietnamese Small and Medium Enterprises in Spice, Fruit and Vegetable Sub-Sectors" (SFV-Export), which is funded by the EU Delegation to Vietnam, during 2022 – 2023.
Country Director of Oxfam Vietnam Vu Thi Quynh Hoa said the project aims to support Vietnamese spice, vegetable and fruit exporters to increase sales in the EU market.
The project will provide specific technical support packages designed for each enterprise in terms of quality and supply chain management, and market development towards pushing up exports to the EU. Connection opportunities between businesses and potential customers from Europe will also be promoted in both face-to-face and online forms.