Rules of origin and non-tariff measures in EVFTA and VKFTA: Matters of interest for businesses

The workshop aimed to support state management agencies and businesses to fully grasp commitments on rules of origin and non-tariff measures in EVFTA and VKFTA.

This event is part of the series of workshops to be organized by the EU-MUTRAP project in 2016-2017 for the purpose of disseminate important FTA commitments among businesses.

Regarding customs and trade facilitation, commitments on customs procedures and cooperation and legal provisions will be a bridge for customs authorities to access new standards and use modern methods for more efficient and proactive customs management. However, to take advantage of these opportunities, in the coming, Vietnam should continue to improve capacity of customs officials, develop a fine information and risk management system and innovate management methods. Import and export tax revenues will be greatly affected by these commitments.

After the workshop, state management agencies and businesses will be able to make good use of regulations of rules of origin and non-tariff measures in FTAs, helping Vietnam’s exports to better penetrate the EU and Korean market. Besides, Vietnamese businesses can also gain competitive advantage against their regional competitors thanks to tariff reduction as a result of FTAs.

Speakers delivered presentations on two key subjects of an FTA, namely rules of origin and non-tariff measures, pointed out noteworthy issues to which businesses need to pay attention so that they can take the right actions to enjoy preferential tax. These speakers were experts coming from ministries and agencies take direct part in negotiations such as the Foreign Trade Agency (Ministry of Industry and Trade), SPS Office, TBT Office and Vietnam Customs (Ministry of Finance).

Additionally, experts gave practice exercises in determination of origin under commitments in order for participated businesses to perfectly understand and apply them properly to self-determine their products’ origin for export to the EU and Korea.

In terms of SPS, the level of commitments in VKFTA is not really high as they mainly focus on technical cooperation. Meanwhile, the EVFTA contains detailed provisions, especially provisions on Verifications, Recognition of the equivalence and Special and differential treatment. Challenges are revealed during implementation: implementation of SPS commitments involves a wide scope of national legal regulations and a lot of specialized agencies; the levels of development, SPS regulations and application practices in each country are different; Non-tariff measures play an important role in negotiations on market access; and Protectionism still exists. Therefore, it is necessary that businesses update fully on SPS regulations in different countries and particularly ASEAN Harmonized Standards. They also need to focus on quality, food safety and building the image of Vietnamese agricultural products by applying international standards, developing clear marketing strategies and studying psychology, custom and religion of consumers in importing countries.

In terms of TBT, it can be said that compliance with TBT requirements is a prerequisite for Vietnam’s exporters to access the EU, Korean and the world market. FTAs shape a framework for technical assistance, discussion and cooperation on TBT issues, promotion and facilitation for compliance of Vietnam’s exports with partners’ regulations. FTAs also urge Vietnamese enterprises to engage in global supply chain through application of technical standards and regulations and conformity assessment. FTAs create a strict regulatory framework for TBT, helping to increase transparency, stability and predictability, and to boost investment from both Vietnam and other partners.