Farm produce will enjoy low or zero tariffs under the free trade agreements (FTA) Vietnam has signed, but technical barriers to trade would be erected by foreign signatories to protect their producers, heard a seminar last week.
At the seminar on how prop up farm exports in Hanoi, Nguyen Thi Hoang Thuy from the Vietnam Trade Office in Australia said Australia is a potential market for Vietnamese goods but it has high food safety and hygiene standards designed to protect domestic agriculture.
Not until April 17, 2015 did litchi become Vietnam’s first fresh farm product to be licensed for import into Australia, followed by mango and dragon fruit. However, according to Thuy, Australia’s product quality standards are a major impediment.
Regarding Vietnam’s litchi shipments to Australia, only one entered the market with ease while the rest faced more screening or were even returned to Vietnam. “We have asked the Plant Protection Department to thoroughly check all shipments before delivery,” Thuy said. “If we are unable to solve the issues of cost and quality, I’m afraid, our exports there would not be sustainable.”
According to the Vietnam Trade Office in Australia, the Vietnamese litchi price is high in Australia, so it cannot compete with similar farm produce already available there. While the irradiation cost in Thailand is US$0.3 per kilogram, it is US$0.5-0.8 in Vietnam. Similarly, the Thai air transport cost is only US$1.6 per kilogram, well below Vietnam’s already discounted fee of US$2.6.
Besides concerns over product price and quality, Thuy said, Australia has a variety of trade barriers to Vietnam’s frozen shrimp, forcing many exporters to shift to exporting processed shrimp.
Vietnam’s shrimp has been able to make its way to other picky markets like the U.S., Japan and the EU, but not Australia. “Vietnamese authorities should work with Australia to solve this issue,” she noted.
Vietnam’s minister counselor in the U.S., Dao Tran Nhan, said farm produce from Vietnam is facing a lot of anti-dumping and anti-subsidy lawsuits and technical barriers to trade.
The U.S. also wants every product to have a barcode that allows customers to check their origin by smartphone.
According to Deputy Minister of Agriculture and Rural Development Tran Thanh Nam, the Ministry of Industry and Trade and commercial counselors and attachés have assisted the agricultural sector to deal with technical issues in export operations over the years. The two ministries have also coordinated closely in negotiating with China over rice sterilization, re-exporting dragon fruit to Taiwan and working with the U.S. over the farm bill that affects tra fish imports from Vietnam.
However, Deputy Minister Nam said Vietnam has yet to fully tap its agricultural potential and make the most of opportunities in the integration process. Farm export revenues are still low, competitiveness limited, export prices unstable and products not diverse, he added.
Agro-forestry-aquaculture exports are forecast to improve this year owing to rising demands and opportunities to enjoy preferential tariffs despite difficult market access and a lack of product diversity.
The U.S. market is huge but full of competition, with many Chinese, Thai and Indonesian products similar to Vietnam’s. Technical and trade barriers have made it tough for Vietnamese enterprises to export goods to the American market.
Meanwhile, the biggest problem faced by Vietnamese exporters in the EU market is non-tariff barriers such as strict quality, safety, hygiene and origin conditions.
Besides, one huge disadvantage faced by Vietnam is the agricultural sector is heavily dependent on the big yet unsustainable Chinese market.
Source: thesaigontimes.vn
Key words: Firms, need to be aware of, non-tariff barriers
