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EU non-tariff barriers becoming key obstacle for Vietnamese goods

Vietnamese okra is at risk of being banned from entry into the EU due to high levels of pesticides found in recent imports. As a first step, the European Union has increased inspections of the okra coming from Vietnam. Similar action has been taken for instant noodles, dragon fruit, and durian.

The European Union-Vietnam Free Trade Agreement, known by the acronym EVFTA, has opened up trade between Vietnam and the EU, however, the EU market has proved challenging for local agricultural producers. In many ways, this is a good thing in that it is forcing local producers to reduce their use of pesticides and produce safer, better products. On the other hand, however, it can make the benefits of the trade deal lopsided in favour of the EU. 

For context, the EU benefits largely from the trade deal through imports of manufactured goods with reduced or zero tariffs. The manufacturing sector in Vietnam, however, is dominated by foreign firms. That said, the aforementioned agricultural products are generally produced by local farmers with the financial benefits going to Vietnamese producers, often in rural areas. Moreover, it’s the export of Vietnamese fruits and vegetables to the EU that has been used to sell the trade deal to the Vietnamese people. In this light, these barriers could prove problematic in terms of attitudes toward and acceptance of the trade deal as well as morale among Vietnamese farmers.

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