New technical barriers are dense
According to Mr. Ngo Xuan Nam, Deputy Director of Vietnam Sanitary and Phytosanitary Notification Authority and Enquiry Point (Vietnam SPS) under the Ministry of Agriculture and Rural Development (MARD), technical barriers are mushrooming in export markets, and domestic exporters are struggling to cope with them. For example, from July 21 to now, the office has received and sent 37 notices of new effective regulations on food safety and hygiene to enterprises.
In addition, 68 other draft notices are being sent for opinions from members of the World Trade Organization (WTO). From the beginning of the year, hundreds of new technical barriers, mainly related to food safety and hygiene issues, have been promulgated by many countries and territories. They include the most recent decree of the Government of Thailand on the temporary suspension of imports of live poultry and poultry meat from Vietnam to prevent the spread of highly pathogenic avian influenza (sub-variant H5N1). It also explains why several export orders of this commodity of Vietnamese enterprises are almost banned or have to be returned.
Previously, because of many potential risks to consumers’ health when importing products from third countries, the European Union had compiled a list of foods from third countries, including Vietnam, subject to special inspection measures.
Specifically, the EU will increase the frequency of testing for coriander, sweet basil, mint, parsley, okra, and capsicum to 50 percent for the content of Dithiocarbamates, Phenthoate, and Quinalphos. At the same time, it will increase the frequency of testing to 20 percent for dragon fruits for the content of Dithiocarbamates, and instant noodles for the residue of Ethylene oxide. This has significantly limited the export market share of Vietnamese enterprises in these countries.
On the other hand, Mr. Nguyen Chanh Phuong, Director of aKa Furniture Company, Vice Chairman of the Handicraft and Wood Industry Association of HCMC, said worriedly that enterprises would not only face strict technical barriers but also a risk of order cancellation due to a sharp decrease in the purchasing power in some key exporting markets, such as the US and Europe. Feedback from member enterprises shows that most of them are being asked to delay the delivery of export orders or cancel export orders. Meanwhile, it is not enough to cover the cost of the volume of goods produced with a deposit fee of 10-15 percent for export orders. Currently, the inventory of enterprises is quite high because their partners delay or cancel receiving goods, causing fairly large losses.
No more loopholes
That is the assertion of enterprises, as well as economic experts when talking about the current export market. Ms. Tran Thi Thu Thuy, Deputy Director of the Export Support Center under the Ministry of Industry and Trade, said that technical barriers in general and food safety and hygiene standards, in particular, are mandatory conditions of vital value for enterprises if they want to maintain export market share. Even China - the largest and easiest market - has adopted many standards to tighten the control on food safety and hygiene, including the Zero Covid policy that this country still implements. Therefore, enterprises will no longer have any bypass or escape other than production conversion to ensure that they meet the standards of quality, food safety, and hygiene prescribed by export markets.
Ms. Tran Thi Thu Thuy said that ensuring quality and proactively approaching new markets is a strategic solution for enterprises not to lose export momentum.