Hanoi (VNA) – Aftertwo years of enforcement, the EU - Vietnam Free Trade Agreement (EVFTA) hasgenerated initial results, but rising inflation in the EU and the eurodepreciation are affecting Vietnamese firms, requiring urgent solutions to those difficulties.

Thanks to the EVFTA that took effect on August 1, 2020, Vietnam’s exports to the EU still rose 14.2% year onyear to 45.8 billion USD in 2021 despite the COVID-19 pandemic’s impacts. Therevenue increased 22.6% to 23.82 billion USD in the first half of this year,statistics show.

Notably, about 7.8 billionUSD in exports to the EU used the EUR.1 certificate of origin in 2021. Up to5.84 billion USD worth of goods used this type of certificate in the first sixmonths of 2022, up 32.1% from a year earlier.

Tariff cuts under the EVFTA havebeen capitalised on relatively well by sectors. About one-fourth of the Vietnameseexports to the EU have benefited from certain forms of preferential treatmentunder this new-generation FTA, Luong Hoang Thai, Director of the MultilateralTrade Policy Department at the Ministry of Industry and Trade (MoIT), told the Quandoi Nhan dan (People’s Army) daily.

Apart from trade, the dealhas also helped facilitate EU investment influx and created momentum forinstitutional reforms, business climate improvement, and transition to acountry with a skilled workforce.

It is said that Vietnamesefirms now hold great chances to boost shipments to the EU since the two marketsare complementary to each other, the 27-member EU with a combined population ofover 500 million has huge demand for imports, and businesses aregradually becoming familiar to the commitments under the EVFTA.

However, challenges are also lying on the way ahead, according to Quan doi Nhan dan.

While high inflation hasundermined aggregate demand in the EU, the euro depreciation trend over the pastyear and the bloc’s fast changing trade policy have considerably affectedVietnamese businesses.

Tran Thanh Hai, DeputyDirector of the MoIT’s Foreign Trade Agency, said facing such difficulties, the ministry has been taking numerous solutions, especially promoting the opitimisationof tariff cuts under FTAs.

Regarding changes in the EU’strade policy, Thai noted this market is strongly shifting to environmentallyfriendly products and those meeting labour standards, which means consumers nowpay attention to not only prices and quality but also the production process.

For example, the EU requiresapparel imports be durable, reusable and mendable, so producers must use recycledand environmentally friendly yarn, he went on.

In terms of agricultural andfood products, Nguyen Khac Tien, Chairman of the Ameii Vietnam JSC, held thatenterprises should be more serious in controlling their production process,from cultivation, harvest to product testing.

Continuing to tap into theEVFTA is believed to be one of the important factors helping with Vietnam’s post-pandemiceconomic recovery.

Nguyen Thi Thu Trang,Director of the WTO and Integration Centre at the Vietnam Chamber of Commerceand Industry (VCCI), held that the most important thing is to providesufficient information for enterprises so that they can make the best use ofthe agreement./.