Making use of EU regulation to boost exports(VOV) - However, leading experts say the GSP scheme, in fact, only provides modest benefits to Under the scheme, GSP is applied to most of Tran Ngoc Quan, deputy head of the European Market Department under the Ministry of Industry and Trade, postulates the GSP scheme will no longer be valid when a free trade agreement (FTA) between Although graduation thresholds increase from 15% to 17% on products, excluding garments, many of Vietnamese exports are likely to reach these threshold levels and will not enjoy EU preferences. If the new GSP is applied, the market share of Vietnamese coffee, tea and spices in the EU will increase to 21.68% from the current 12.11%, meaning these products will cross over the graduation threshold and will not receive preferences. Similarly, Vietnamese seafood and footwear are no exception, as these two groups of products are expected to make up 19% and 34% of the EU’s market share respectively.  Claudio Dordi from the EU Investment and Trade Policy Support Project says EU tariff incentives create a competitive advantage for Vietnamese garment businesses, especially when their major rival, China, is paying Most-Favoured-Nation (MFN) taxes which are 3% higher than GSP levels on average Customers, therefore, will place orders with However, Dordi warns the GSP brings a definite competitive advantage as the validity of the GSP is not permanent. Than Duc Viet, a Garment 10 Corporation representative, says the most difficulty in gaining GSP advantages is to meet Rules of Origin of materials to get certificate of origin (C/O) form A. Currently, the company cannot apply for incentives for its FOB products as most of its materials are imported from Internal strength needed Former Trade Minister Truong Dinh Tuyen posits GSP does not exert sufficient pressure on economic restructuring, thus affecting a trade balance. Exports may rise thanks to GSP, but imports may also increase due to low competitiveness in labour productivity, quality and production costs. As This means GSP creates an external source of competitive advantage and domestic businesses should not rely on this source, Tuyen says. Instead, he advises businesses to grasp GSP rules to avoid obstacles, even losses when exporting products to these markets. To this end, the former Trade Minister says business should make full use of GSP incentives by improving product quality, diversifying their exports, and reducing costs and prices to sharpen the competitive edge of Vietnamese products. In addition, a greater effort is needed to accelerate economic restructuring and growth model shifting, he concludes. VOV |
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