How to boost exports to the EU

Lacking information

Phan Kieu Anh, an expert from the Vietnam Chamber of Commerce and Industry (VCCI) pointed out that the Central Highland province of Dak Lak which is one of the major coffee producers in Vietnam and the world has still relied on the global market to fix its coffee prices.

“Had local businesses gained quick access to information about the world market, coffee export value would have been much higher,” said Mrs Anh.

Dak Lak’s coffee is not a single case. According to the CIEM, 13 percent of the surveyed businesses knew nothing about EU regulations on dumping lawsuits, nearly 51 percent knew a little and only 36 percent knew well. In addition, many businesses did not grasp the EU’s legal system as well as its quality, ecological and environmental standards.

Vietnam mainly exports agro-forestry and fisheries products, garments and leather and footwear to the EU. Experts claimed that there are sensitive products which are vulnerable to the EU’s non-tariff barriers and dumping lawsuits. Most Vietnamese products exported to the EU are cheap as they aremade under manufacturing contracts. It is an important reason behind EU decisions to launch investigations and file dumping lawsuits.

In fact, the EU has sued Vietnam for dumping its leather footwear products on its market and imposed accumulative anti-dumping tariffs on the products, causing a great loss to producers. The huge market has also refused to accept seafood shipments as they failed to meet its food hygiene and safety regulations.

Vo Tri Thanh, head of the Research Institute for International Integration Policy under the CIEM, said businesses can avoid barriers and safeguard measures, including dumping lawsuits filed by the EU if they know and observe its regulations. In his opinion, to avoid these barriers, local businesses should diversify its products and pattern structure by making full use of competitive advantages of low labour cost and abundant natural resources to generate products of higher value. In addition, they should get direct access to information about the EU’s non-tariff barriers such as requirements of food hygiene and safety and environmental factors.

Exploring the market

Many people have for long thought that the EU only consumes top quality products. It is not true. After its recent enlargement, most new EU members have per capita income at an average level. For instance, while Luxembourg’s per capita income stands at more than US$30,000/year, the figure in Slovakia is merely US$1,000. Therefore, local businesses are advised to explore markets within the EU to find suitable importers.

Meanwhile, chief executive officer Dr Le Dang Doanh said export products should contain high contents of technology and intellect.

“There are different ways to process shrimp of higher value for export. For example, we can process fried and powdered shrimps instead of fresh and frozen shrimps as before. Similarly, we can also make different types of dried noodles for export. Businesses should devise their strategies for each market by exploring and cooperating with importers,” said Mr Doanh. According EU regulations, import products from developing and less-developed countries enjoy many preferences. The EU exempts import tariffs to be imposed on non-sensitive products and reduce the tariffs by 3.5 percent on sensitive products. It also encourages its businesses to import products from developing countries. These are favourable factors for Vietnamese businesses to boost exports to this lucrative market.

Local businesses find it easy to boost exports to the EU if they get up-to-date information about this market. To this end, they should coordinate with craft associations, trade promotion agencies, diplomatic corps and research institutes to get useful information about this market.

Source: VOV