Vietnam is hoping its free trade deal with the European Union, which is expected to enter into force later this year, will give it an advantage over competitors, allowing it sell more shrimp to the bloc, the Vietnam Association of Seafood Exporters and Producers (VASEP) said Tuesday, 18 February.
The European Parliament on 12 February endorsed the E.U.-Vietnam free trade agreement (EVFTA), which it said is the “most modern, comprehensive and ambitious agreement ever concluded between the E.U. and a developing country.” The pact will abolish almost all customs duties between the two sides over the next 10 years.
The E.U. was the biggest buyer of shrimp from Vietnam last year with an export value of USD 689.8 million (EUR 636.4 million), down 17.7 percent year-on-year. Of that total, 79.9 percent of sales to E.U. was whiteleg shrimp, with giant tiger shrimp accounting for 12.2 percent, VASEP said.
Frozen giant tiger shrimp from Vietnam to the E.U. will be removed from any tax, from the current generalized system of preferences (GSP) of 4.2 percent. The duty for frozen whiteleg shrimp will also be abolished in five years.
After the new deal goes into effect, Vietnam's primary competition in the shrimp sector will still face duties on their exports to the E.U. Both Thailand and Ecuador are taxed 12 percent, while India and Indonesia are levied 4.2 percent of GSP, VASEP said.
It is expected that India, Thailand, and Indonesia will not focus heavily on the E.U. market this year, as they are not likely to increase production sharply, VASEP added.
In the first half of January, Vietnam exported shrimp worth USD 17.5 million (EUR 16 million) to the E.U., down 10.3 percent from a year earlier. It is forecasted that sales to the E.U. in the first quarter of this year will continue the downward trend due to the COVID-19 (coronavirus) outbreak. Importers in the bloc will also be hesitant to purchase as they expect prices to decline further, VASEP said.
But with tax advantages brought about by the free trade deal and a growing interest from Vietnamese exporters to E.U. markets, sales to the bloc are forecast to rise 15 percent to USD 800 million (EUR 738 million) this year, according to VASEP.
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