Vietnam seafood export situation to the European Union

Vietnamseafoodexportsituationto the European Union

 

In recent years, the European Union(EU) is a large marketnot only forexport products of Vietnam in general, but alsofor Vietnam seafood in particular. In the 1995s, VietnamandEUsigned a tradeframework agreement as well as many other bilateralandmultilateral agreements, VietnamandEU are currentlynegotiatingto sign the free trade agreement (FTA).

Keywords:Export activities, aquiculture, VN-EU FTA.

 

1. Problem

Trade relationship between Vietnam and EU is constantly developing and expanding. Since Vietnam Framework Agreement — EC was signed in 1995, trade and economic relationship between the two parties has been stepped flourishes, which seems particularly for the commercial benefits of both sides, matching and opening integration trend in nations over the world as well as the economic development strategy of Vietnam and EU. In recent years, exporting goods of Vietnam to the EU market has had a significant increase. One of the items with large export level to the EU market is seafood. The EU is one of the leading seafood importers in the world, Vietnam's seafood exported to EU market is highly appreciated both quality and competitive price. Therefore, consumers in the EU really believe in this item. Export turnover of aquatic products of Vietnam to the EU market in recent years constantly increased with 11.9 billion in 2002. By 2013 seafood exports rose dramatically to 24.4 billion dollars (nearly 2.5 times compared with 2002).

However, the EU's demand about quality as well as seafood in particular is really high. Hence, Vietnam’s seafood has exported to EU market in recent years is not commensurate with the available potential of both sides. In addition, Vietnam’s seafood products has not meet the requirements for quality and food safety in order to compete with other countries' seafood such as Japan, China, Indonesia. Therefore, there must be necessary and practical solutions to enhance the competitiveness of Vietnam in the process of international economic integration, which help to export Vietnam seafood products successfully in the EU market. When the FTA of Vietnam — EU was signed (expected quarter 3/2015), that will tend to the change in orders of seafood, from traditional markets such as China, Indonesia to Vietnam. In addition, according to the evaluation of VASEP, FTA VN-EU, the European Union (FTA VN-EU) will mitigate the non-tariff barriers, such as trade defense measures, testing animal care as well as technicians in the future when Vietnam and the EU have deep commitments over and through the FTA, the non-tariff barriers will be addressed explicitly, greater transparency and barriers will not concern fishery enterprises when exporting goods to the EU market. When the FTA is adopted, there will be a wave of foreign investment FDI in Vietnam to not only seafood processing sector but also farming and related services and capital is one of the strengths of the EU. To take advantage of this agreement, now Vietnam seafood industry should always find out the preferences of consumers in the EU, marketing investment and quality of products will help the seafood business export to the EU market on a sustainable basis, the investment focus rushing and transfer of technology, as well as helping to attract foreign investment in Vietnam [4].

2. Export Situation of Vietnam seafood products to EU in the period of 2011–2014

For aquatic products, each year, EU accounts for 40 % of the world imports. This is a major consuming market of aquatic products with 12.3 million tons (in 2011), approximately 24.5 kg per person [1], in which the UK, France, Germany, Spain, Italy, Netherlands are main markets. Therefore, the annual demand for imported seafood of EU is very large. This is a discerning and selective market with strict requirements on quality standards and food safety. Businesses in the exporting country must have equal conditions for production as businesses of the importing country do and must be accredited by EU quality inspection agency. Packaged food must clearly indicate the product name, ingredients, weight, time and product usage, place of manufacture, the conditions for storage and use, codes, bar codes to get shipment forms. Especially, it is not allowed to import aquatic products tainted by the effects of the environment or the forbidden additives to use [1].

Table1

Export value of aquatic productsto EU in 2011–2014

Year	2011	2012	2013	2014	Growth rate (%)
					2011–2012	2012–2013	2013–2014
EU	1,207	1,18	1,089	1,355	100,9	89,4	124,4
Total value	6,112	6,093	6,734	7,876	99,7	110,5	104
Density of EU export/ total export value (%)	19,75	19,99	16,31	17,20	x	x	x

(Source: The General Department of Customs)

 

Aquatic product is one of the major export items of Vietnam. From 2011 until now, in the group of agriculturature, forestry and fisheries, the seafood items are always the items with extremely export value (occupying 35.47 % in 2014). However, there is a “special” item because the process of extraction, production, processing, etc. depends on many factors including natural ones. Vietnam, one of a few countries, is favored by nature when its geographical location borders the sea (with 3.620 km). Vietnamese people live and have strong direct attachment to the sea long long time ago; mining and fishing seem to be the traditional occupations of Vietnamese people. Therefore, seafood is the dorminant export item of Vietnam to the international markets in general and EU in particular [2].

The export proportion of aquatic productsto EU comparing to thetotalseafood exportvalueofVietnamtointernationalmarketsis always high, in the period of 2011–2014(average percent at18.31 %). The growth rate ofexporting aquatic products toEU during2012–2013reduced in comparision with that in 2011–2012 (decreasing 11.5 %). Cause ofthis declineisa consequence ofthe global economiccrisisstartedin 2008andcommercialdefensepolicyofthe EUcountries, especiallytheinternalcausesofVietnam aquaculture production(inputs, seafoodquality, design), etc [3].

Figure 1. The export value of Vietnam aquatic products to EU in 2011–2014

(Source: The General Department of Customs)

 

In the period of2013–2014, the growth rate is quite high with 124.4 %, about 35 % more than in 2012–2013 because in 2014the worldeconomyshowed recovery signals and economicpolicies ofEUtoVietnam also more opened. EU considering Vietnamasa non-marketeconomy, it changed its minds and consideredVietnam as a marketeconomyand allowed Vietnam to accesstariff preferential programs (GSP) andpreferential regulations of most favored nation(MFN). On the other hand, theseafoodexporters from Vietnam also focusmore onqualityassurance, design and aquaticspeciesunder thestandards required by theEU importers [4].

As can be seen from Table 2, not all 28 EU members imported aquatic products from Vietnam; there are only 14 main countries. Among countries importing aquatic products from Vietnam, Germany, the UK, Belgium, Netherlands, France, Italy andSpainarethe countrieswith high import value of seafood. It can be said that they are main markets of Vietnam seafood to EU.In 2011,Vietnamexported to EUwiththe achievedvalue was1.206.635.133$.

Table 2

EU countries importing seafood Vietnam in 2011–2014

Unit: USD

No	Country	2011	2012	2013	2014
1	Poland	44.362.271	32.314.855	26.234.973	28.726.319
2	Belgium	108.103.991	91.688.581	106.387.541	145.990.464
3	Portugal	39.606.686	173.337.007	47.854.637	54.319.921
4	Czech Republic	10.138.109	6.552.703	4.660.581	12.612.413
5	Denmark	25.312.805	27.456.786	30.009.505	40.699.323
6	Germany	223.418.055	201.706.027	206.607.438	237.314.127
7	Netherlands	146.151.876	134.923.452	124.689.787	211.182.120
8	Greek	17.930.097	16.832.346	12.198.250	13.249.859
9	The UK	123.392.464	107.966.689	142.542.842	183.540.897
10	France	120.325.786	116.757.608	119.312.766	141.611.144
11	Romania	13.087.017	10.335.925	8.312.765	9.446.264
12	Spain	151.272.312	132.027.236	118.570.847	120.522.847
13	Sweden	12.454.540	16.193.063	12.326.614	18.890.584
14	Italy	171.079.124	149.889.993	138.671.934	137.142.248
Total		1.206.635.133	1.217.982.271	1.098.380.480	1.355.248.530

(Source: General Department of Vietnam Customs)

 

However, in 2014, this figurehasrisen dramaticallywiththe value of1.355.248.530$. Comparingwith2011,the export value ofseafoodto EU in 2014increased148.613.397$, equally 12.32 %. This indicatesthatVietnamaquatic productshavehada strong position in EU and was accepted by European strict consumers.In 2014,Germany,Netherlands, UK, Belgium, France, Spain and Italyseafood importedVietnam seafood with a greatvalue(100 million $), especially GermanyandNetherlands(Germany:237.314.127 $, Netherlands: 211.182.120 $). In addition,Portuguese and Denmark are also thecountries withthe quite high importvalueof seafood of EU [4].

3. Recommendations to improve seafood exports of Vietnam to EU in the future

Free Trade Agreement FTA Vietnam-EU (EVFTA) in the near future is rated as one of the important forward steps for the economic development in Vietnam, when EVFTA was signed, export of Vietnam will have an easier access to the EU market because the framework of the FTA will allow elimination of tariffs on 90 kinds of taxes. Thus, exporting Vietnam seafood has increasingly more complete, more closely to the situation to compete with rivals in the world. After researching, reviewing seafood exports of Vietnam as well as the EU market the authors offer a number of recommendations to enhance exports of items to the EU, as follows:

First, the proposals on tariff barriers charges

The authority of government need to assess all the factors, influence of FTA Vietnam -EU to Vietnam's economy, which consulted the relevant bodies, business associations to propose negotiation plans effectively for the benefits of the nation; Enhancing information and disseminating laws, trade policies of the EU countries help business to timely capture, organization active in production and export of aquatic products to meet requirements about technical standards, sanitary and phytosanitary, environmental, health and safety of consumers and importing countries. Developing and implementing programs and projects aim to support for enterprises, especially SME investment in technological innovation, strengthening equipment, technical new, applicable international standards...

Secondly, the proposals for the technology

Enterprise is actively involved in technology products manufacturer. Technology Policy which is appropriate and most effective in the fisheries sector is to combine technological level different, forming multi-storey technological structure, should study and deploy applications capture, mastering new technology, basic technology. Study is focused on information technology, biotechnology in fishing, aquaculture and seafood processing to create a breakthrough in technology and economics. Soon there are policies to encourage companies importers, upgraded modern technology, proprietary technology, invite professional trainer and increase investment in research and application of new technologies [5, 6].

Thirdly, the proposals on labor resources

It is said that labor is one of three elements that constitute the charge of seafood items. The labor force in mining, seafood processing current shortage important, especially in coastal provinces have developed fisheries. With the inevitable trend, exploitation ships are equipped with modern equipment, requiring engineers to operate and control. At the same time, it is necessary to accelerate the mechanization and modernization of vessels fishing equipment to improve the efficiency of manufacturing operations at sea, which encourage motivation to employees under sea craft. Manpower for the offshore fishery is taking elements decided for the sustainable development of fisheries.

Fourth, the proposals on credit

Capital needs of export enterprises in general and export enterprises in particular fisheries, as well as organizations and individuals fishing, seafood processing is very high. Supporting resolution of financial difficulty for exporters, mining and processing seafood is identified as a top priority. Therefore, the State Bank is considered for debt restructuring, debt restructuring period for the fisheries sector. Separating budgets support for the fishermen in the bank loan. In addition to commercial credit policy of the financial and credit, it should be more support programs such as loans and other credit for poor households, loans to create jobs...The government guarantees the financial system, stable credit to support businesses, farmers and fishermen improve the efficiency of production operations business, while contributing to lower production costs, stable quality, hygiene and food safety seafood raw materials.

Fifthly, the recommendations on product quality

The branding for the export of seafood from Vietnam should become a top priority in the agenda of the General Fisheries, VASEP, Trade Promotion Department, the trade representative of Vietnam abroad. it should aim at sustainable development by improving the quality and application of production techniques production, processing, system with advanced quality standards. Aquaculture development planning seafood along with environmental protection and comprehensive management of the quality of the seed stitch, food, veterinary medicine should closely follow the needs, tastes, and consumption habits of the EU market for with seafood items, so that, production, export of aquatic species models, quality and safety [2].

4. Conclusion

In sum, the EU is one of the potential export markets in Vietnam, especially for seafood. It is an evidence that the export value and speed growth of this commodity has been increasing in recent years despite the effects of negative from the economic downturn. However, the EU has many high requirements, to survive and grow seafood in this market, Vietnam must strive in improving its products and towards common standards of the world as well as the EU. Especially, after the FTA of Vietnam — EU was signed.

 

References:

 

1.      CBI (2012). The Vietnamese seafood sector — A value chain analysis. Netherlands: Centre for the Promotion of Imports from developing countries.
2.      Do H. (2010). All at sea. Vietnam Economic Times, 167–169.
3.      Europa (2014). Retrieved 7 27, 2015, from Europa: http://ec.europa.eu/food/safety/international_affairs/trade/docs/im_cond_fish_en.pdf
4.      GSO (2013). The Yearbook. Hanoi: Statistical yearbook.
5.      Vu, C. L. (2004). The solution boosting exports of goods from Vietnam to the EU market. Hanoi: The Political Publish.
6.      Do Quang and Hoang Hai Bac. A number of measures to boost exports of Vietnam seafood products to Russia. Proceedings International Scientific Workshop on Comprehensive Economic Cooperation between Vietnam and the Russian Federation in new context, Hanoi 2014, 80–97.