Vietnamese exports to EU banging against thick barriers to entry

Vietnamese exports to EU banging against thick barriers to entry

The EU, the center of the global public debt crisis is tightening its belt, which means that the export market for Vietnam has been narrowed. Besides, the importer also sets up a lot of strict technical barriers.

Vietnamese enterprises have complained that it is getting more difficult to export products to the EU. Some enterprises have been sitting idle because of the lack of the orders.

In fact, the problem has been warned by Vietnamese economists. Bui Thi Thanh An, Chief Representative of the Vietnam Trade Promotion Agency (Vietrade) in HCM City, said that in crisis, the protectionism will be strengthened by importers in order to protect their local production. In reality, the EU has strengthened the control over the quality of imports. Besides, the economists can also see the higher possibility of lobbying for anti-dumping lawsuits against the export countries.

Businesses thirsty for orders

Tran Ngoc Quan, Deputy Director of the EU Market Department under the Ministry of Industry and Trade, said that the EU, together with the US and Japan, are the three most important markets for Vietnamese exporters.

The Vietnam-EU trade turnover has been increasing rapidly in the last few years. Vietnam exports seafood, rice, coffee, garments and footwear products. In 2011, Vietnam exported 14.5 million dollars worth of rice (up by 85.6 percent), 1 billion dollars worth of coffee (+ 48.05 percent), 325.5 million dollars worth of cashew nuts (+43.1 percent), and rubber, seafood and garments.

However, since early 2012, as the EU countries have to face the public debt crisis, they have to curb expenses, thus leading to the slowdown in the Vietnam’s export growth to the market.

Some big wooden furniture sellers have said that the orders from the EU have dropped by 50-60 percent in comparison with the same period of the last year. Garment, footwear and handicrafts exporters have also voiced the same complaints.

Not only the lower spending, but the strict technical barriers have also blocked Vietnamese exports to the EU market. According to the Ministry of Industry and Trade, the EU is still maintaining the policy on inner-bloc production protection, applied to the 27 member countries. Therefore, the overly hot export growth to the market may lead to the fact that the EU would carry out safeguard and anti-dumping measures.

Too many barriers

Also according to the ministry, there are a lot of requirements or regulations Vietnamese enterprises have to refer to when exporting to the market, including REACH - the European Community Regulation on chemicals and their safe use, TRACY – the regulation on tracing consignments of goods to their origin, or IUU – the regulation against illegal fishing.

Besides, the EU member countries are also pushing up the enforcement of the FLEGT – the Forest Law Enforcement, Governance and Trade – which requires exporters to show that they use legal timber. In general, experts say, the standards and regulations on exports to the EU can be described as a “matrix.”

Recently, the EU has set up some new requirements on food hygiene, technique and product quality which cannot be satisfied by all enterprises. The EU, for example, has set up some requirements on seafood residue certificates which many laboratories cannot grant.

Most recently, some vegetable exports to the EU have been discovered as not satisfying the requirements. The Ministry of Agriculture and Rural Development has requested enterprises to obtain export certificates before shipping. However, just within one month, Vietnamese enterprises were found violating the regulation two times. If the number of violations reaches five, the EU may ban the import of the products.

vietnamnet