(vasep.com.vn) After over 2 years of negotiation, Vietnam and EU reached agreement. The EU-Vietnam FTA will eliminate nearly all tariffs (over 99%), except for a small number of tariff lines for which the EU and Vietnam agreed on partial liberalization through zero-duty Tariff Rate Quotas (TRQs). Accordingly, canned tuna from Vietnam will need 7 years to be completely tax-free when imported into the EU. Does the long journey worth it?
Statistics from Vietnam Customs, Vietnam's tuna exports to the EU in H1/2015 reached nearly 54.4 million, down nearly 22% over the same period. Exports of processed tuna increased while fresh and frozen tuna fell.
Among EU nations, Germany, Spain and Italy continued to be the biggest tuna importers of Vietnam. According to Eurostate, in 2014, the EU imported 13,000 MT of canned tuna from Vietnam, 60% of which were for Germany. However, Spain tuna imports from Vietnam increased by 28%, reaching US$ 7 million while those of Germany decreased by 17% and those of Italy were down 49%.
The first 4 months of this year witnessed a drop in tuna imports of the EU. Statistics from the International Trade Centre (ITC) showed that from January to April 2015, tuna imports of 28 EU countries reached nearly $ 1.3 billion, down 18% year on year. Imports from most major sources fell sharply, in which those from Ecuador were down 29%, those from Thailand fell by 51% and those from the Philippines decreased by 34%. Currently, Vietnam is the 9th biggest source.
When EVFTA takes effect, with the exception of canned tuna, all tuna products imported to the EU from Vietnam will be exempt from tax while canned tuna products need 7 more years to achieve this. In the short run, this would reduce the competitiveness of tuna from Vietnam as products from Ecuador and the Philippines have already been exempt.
Statistics showed that canned tuna imports into the EU fell sharply in the beginning of this year after growth in 5 successive years. In Q1/2015, imports of canned tuna to the EU fell by 15% by volume, at the lowest level since 2008.
The Philippines has taken advantage of GSP+ to increase exports to the EU, especially to Germany. In Q1/2015, imports of canned tuna of EU countries from the Philippines were up 7% year on year. Meanwhile, canned tuna from Vietnam exported into the EU is taxed at 20.5%.
After all, in the long run, EVFTA will create advantage for tuna exports of Vietnam, especially raising quality. However, in the short term, difficulties are still there.