European Parliament approves trade deal with Vietnam
The European Parliament on 12 February endorsed a free trade agreement with Vietnam that is expected to open way for more seafood products to flow into the European Union.
In a statement, the parliament said the E.U.-Vietnam free trade agreement (EVFTA) – the “most modern, comprehensive and ambitious agreement ever concluded between the E.U. and a developing country” – will abolish almost all customs duties between the two sides over the next 10 years.
The Investment Protection Agreement (IPA) also got approval from the European lawmakers on 12 February.
Vietnam’s National Assembly is expected to ratify the pact in May and the EVFTA is set to become effective from July, Vietnam’s Minister of Industry and Trade Tran Tuan Anh told reporters on 12 February.
The European Commission also said the trade deal is likely to come into effect in early summer this year.
Once the deal comes into force, seafood exporters from the Southeast Asian nation will have “huge opportunities” to speed up exports to the E.U., the Directorate of Fisheries of Vietnam has said. About half of the import taxes on seafood products from Vietnam to the E.U. will be removed immediately after the agreement becomes effective, with the remainder eliminated within seven years from the effective date of the pact. The E.U., however, will give Vietnam annual quotas for duty-free imports of 11,500 metric tons (MT) of canned tuna and 500 MT of canned fish balls. Additional volumes beyond the quotas will be taxed, according to reports from the directorate and the Vietnamese Finance Ministry’s National Institute for Finance.
Shrimp and pangasius are the top two seafood products Vietnam exports to the E.U. According to Vietnam Association of Seafood Exporters and Producers (VASEP), the EVFTA is expected to help significantly boost the competitiveness of Vietnam’s seafood sector in E.U. markets.
Shrimp from Vietnam to the E.U. were worth USD 689.8 million (EUR 632.8 million) in 2019, down 17.7 percent from 2018. Import duties for fresh, frozen, and iced shrimp from Vietnam will be removed immediately after the EVFTA becomes effective, while the tax for processed shrimp will be eliminated after seven years from the agreement’s effective date.
The value of pangasius shipped from Vietnam to the E.U. fell 3.5 percent to USD 235.4 million (EUR 216 million) last year.
Vietnam’s largest pangasius exporter, Vinh Hoan, has said that live, fresh, dried, and frozen pangasius forms (coded HS03) are currently taxed at 5.5 percent by the European Union, and the other pangasius products (HS16) are taxed at seven percent. The EVFTA will eliminate all E.U. tariffs in three years for the former and in seven years for the latter after the agreement enters into force.
Photo courtesy of Novikov Aleksey/Shutterestock