When the agreement is approved, Viet Nam's export turnover to the EU is expected to increase at an average 4 per cent year as tariffs on most products exported to the EU would gradually drop to zero. — Photo citinews

HA NOI (Biz Hub) — Small and medium-sized enterprises (SMEs) are still not prepared for the Viet Nam – EU Free Trade Agreement that is expected to be signed this October, officials warned.

Deputy Director of the Central Institute for Economic Management, Vo Tri Thanh said, though the date is fast approaching, SMEs are not really prepared for the bilateral agreement.

Echoing Thanh, Deputy Director of the Ministry of Industry and Trade (MoIT)'s European Market Department, Tran Ngoc Quan said that big enterprises are well aware of the agreement as they have taken active part in the negotiations. However, that does not hold true with SMEs.

Quan said that currently, MoIT makes public all information about the agreement to business associations, which then introduces these to its members. However, many SMEs are not association members, due to which they do not have updated information about the agreement.

To make it easy for SMEs to access the information, MoIT is trying to publish all the details of the agreement on its website, Quan said.

The SMEs will be caught napping on the EU market unless they actively prepare for the integration right now, Quan warned.

According to MoIT, Vietnamese firms should spend more time studying EU requirements and adjust their product and production processes to comply with such requirements. The reason for that is the EU imposes many trade regulations to protect human health and safety, animal and plant life, and health and the environment.

These include REACH, the European Community Regulation on chemicals and their safe uses, FLEGT or Forest Law Enforcement, Governance and Trade aiming to reduce illegal logging, and IUU, the regulation against illegal fishing.

Many experts believe that the Viet Nam-EU FTA is one of Viet Nam's most important agreements with other countries as key export staples of footwear, garments and textiles, coffee, along with seafood and wood products are exported mainly to the EU, with billions of dollars of annual turnover each.

When the agreement is approved, Viet Nam's export turnover to the EU is expected to increase at an average 4 per cent year as tariffs on most products exported to the EU would gradually drop to zero. Besides, Vietnamese products to the EU will be more competitive as compared to China's that has not signed the FTA with the EU till now.— VNS