OPPORTUNITIES FROM EVFTA FOR VIETNAM PLASTIC INDUSTRY

According to the General Department of Customs, plastic export turnover has continuously increased in recent years, the average growth rate is 14 to 15% per year. Vietnam's plastic products now exist in more than 150 markets around the world. According to the International Trade Center, the EU's internal plastic products currently have an advantage over imported products. However, in the EU market, Vietnam's plastic packaging products currently have a competitive advantage compared to that of other countries in Asia such as Thailand, China due to no dumping tax (from 4 to 30%).

Imports from Vietnam to the EU-28 ranked in the Top 10 foreign suppliers, reaching 930.6 million USD in 2019, an increase of 5.2% compared to 2018, accounting for 0.4% of total import into the EU. Plastic and plastic products from Vietnam are exported to the EU mainly to markets such as Germany, France, Italy, UK, and Belgium, with main products: 3923, 3926, 3907.

Opportunities from EVFTA

According to the European and American Market Department (Ministry of Industry and Trade), the majority of plastic products subject to the basic tax of 6.5% will be reduced to 0% as soon as the EVFTA comes into effect and no quota and tariff are applied.

In order to enjoy get tariff treatment, the exporters must ensure that their goods meet the requirements of the Agreement on rules of origin for goods. However, for EVFTA plastic and plastic products, the rules of sources are quite flexible. Accordingly, it is allowed to use up to 50% of no-source materials in the production process or the origin criterion is to convert the commodity code at the 4-digit level, in which a maximum of 20 is allowed to be used. Flexible rules of source with plastic products exported to the EU create a great advantage for Vietnamese enterprises. In terms of competition, domestic firms are still passive because the majority of raw materials are imported.

To meet the requirement of domestic and global markets, each year, the Vietnamese plastic industry has to import millions of tons of raw materials such as PE, PP, PS, etc. However, the current domestic capacity only meets about 15 to 35% of the demand for materials.

Another issue mentioned by the European, American Market Department is that the trend to switch to eco-friendly, self-destructing plastic packaging (P.E.T) is increasingly popular in the EU. This is a challenge for Vietnam's plastic industry because, in the export structure, traditional packaging products still account for a large proportion.

However, experts say that some enterprises have actively switched to producing P.E.T materials with high efficiency and started to export to many markets around the world, including the EU. Besides, construction plastics and engineering plastics also have prospects in the EU market if Vietnamese enterprises have good penetration ability and meet high technical standards.

The EVFTA Agreement is also a prospect to attract EU investors into the plastic construction sector and international investors outside the EU into Vietnam's plastic industry.

Source: Cong Thuong News

>>>Click HERE for more market news<<<

Contact

MEGA VIETNAM

Office address: Floor 2-A2-IA20, Nam Thang Long Urban Area, Pham Van Dong Street,

Dong Ngac Ward, Bac Tu Liem District, Hanoi City, Vietnam

Tel: (+84) 24 375 89089; Fax: (+84) 24 375 89 098

Website: megavietnam.vn

Hotline: 1800.577.728 Zalo: 0971.023.523