Agricultural integration poses challenges

11:04 | 10/05/2015 Society

(VEN) - The Ministry of Industry and Trade’s Multilateral Trade Policy Department General Director Luong Hoang Thai said that the Trans-Pacific Partnership (TPP) Agreement, the EU-Vietnam Free Trade Agreement (EVFTA) and the ASEAN Free Trade Agreement were nearing the conclusion of their negotiations. Although Vietnam’s agricultural products enjoy longer tariff reduction schedules than other countries, there will also be greater challenges in terms of competition.

Agricultural integration poses challenges

Minister of Agriculture and Rural Development Cao Duc Phat (left) and International Cooperation Department General Director Tran Kim Long address an online conference on international economic cooperation in the agriculture and rural development sector

Increasing technical barriers

The Ministry of Agriculture and Rural Development’s International Cooperation Department General Director Tran Kim Long said that according to tariff reduction commitments following the ASEAN Trade in Goods Agreement, 1,434 tariff lines were reduced to zero percent among the 1,539 tariff lines in the agriculture and fisheries, while the remainder were set at five percent or had no scheduled reductions. By 2018, only 55 tariff lines would be set at five percent while Arabica coffee and beet sugar would reduce to zero percent, while the tobacco tariff would be maintained at 34 percent. Almost all tariff lines in the forestry and furniture sector were dropped to zero percent, while nine furniture tariff lines stood at five percent but would fall to zero percent by 2018. Following the ASEAN-China Free Trade Area commitments, 21 tariff lines would stand at 20 percent while 80 tariff lines would remain at five percent and 46 tariff lines would have no schedules for change.

Almost all tariff lines in the agriculture, forestry and fisheries sector will reach zero percent by 2018. Countries will restrict imports by introducing non-tariff barriers to protect domestic producers such as animal and plant quarantine and food safety and hygiene requirements in accordance with regulations and international standards.

According to Minister of Agriculture and Rural Development Cao Duc Phat, Vietnam is an agricultural exporter with numerous items such as rice, coffee, rubber, tea, pepper, cashew nuts, cassava and fruits that will benefit when a series of free trade agreements are signed. However, some agricultural products and items such as soybeans, corn, tobacco and cotton will face difficulties due to weak competitiveness.

Luong Hoang Thai said that thanks to free trade agreements due to be signed in the coming time, tariff lines for agricultural products will basically drop to zero percent. In this process, the livestock sector will face many challenges. Multiple partners such as Australia, New Zealand and the US with key exports of pork, chicken, beef and fruits will create huge pressure for Vietnamese agricultural products.

Timely information needed

Ha Tinh Province People’s Committee Deputy Chairman Le Dinh Son said that the province’s agricultural exports were facing difficulties and local goods were not able to compete with imported goods. In addition, the traceability of agricultural products is also a problem. Integration is an inevitable trend but will pose many challenges if the country does not reorganize production. To take the most of opportunities and limit risks in the integration process, the early provision of information in terms of integration, export-import conditions, tariffs and administrative procedures is needed.

Minister of Agriculture and Rural Development Cao Duc Phat said that the agricultural sector needs to make greater efforts to make the most of opportunities offered by international integration. The successful implementation of the agricultural sector’s restructuring project towards increasing added-value and ensuring sustainable development in the sector is to move from passive to active international economic integration.

As a province with large rice and seafood reserves, international economic integration has helped Kien Giang promote exports. However, according to Kien Giang Province People’s Committee Deputy Chairman Mai Anh Nhin, local businesses are facing difficulties as they have not yet known about integration mechanisms and policies. In addition, provincial competitiveness remains low due to the lack of modern scientific and technological developments and equipment. He added that the Ministry of Agriculture and Rural Development should organize training courses for provincial staff to let them know more about integration. In particular, the quality of local labor force is a concern and needs to be improved.

Luong Hoang Thai said that state management agencies mainly provided integration information for businesses and provinces in the past. However, to achieve the highest efficiency, those agencies need information from businesses and provinces in order to determine the advantages and strengths of each region and area.

In the context of deeper economic integration, in addition to supporting businesses to improve competitiveness and build strong brands for agricultural products, better access to information of integration, especially the opportunities and challenges posed by free trade agreements that are due to be signed is necessary in order to help businesses and provinces adopt suitable strategies and reorganize production.    

By Nguyen Hanh