Experts say, the EU-Vietnam Free Trade Agreement (EVFTA) is expected to provide a host of opportunities to Vietnamese enterprises to bolster exports. However, they must also meet the strict requirements in order to fully capitalize on the deal. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), Giang said companies in the sector believe in the prospect of exports to the EU rising after the EVFTA comes into effect, as tariffs will be slashed to zero percent.

However, businesses need to be thoroughly prepared to make use of the opportunities and have a solid grasp of the regulations within the agreement, because the EU is a demanding market with strict requirements on product quality and design. Phi Viet Trinh, General Director of the Ho Guom Garment JSC, said that in order to benefit from the preferential tariffs under the EVFTA, products must have a certain proportion of materials hailing from the EU or Vietnam. Therefore, management agencies and businesses alike must take certain action to maximize the opportunities.

Nguyen Quoc Tuan from Vinh Thong Co, a footwear exporter to Europe, expects the EVFTA to boost exports over the remainder of 2020. Nevertheless, he also acknowledges that the company will encounter a range of difficulties in adhering to the agreement’s rules of origin, as while 60 percent of its input materials come from domestic suppliers the remainder come from elsewhere, primarily China. Updating technology and expanding production scale are also problematic given that the company’s internal resources remain modest.