Vietnams seafood exports perform swimmingly due to free trade deals

Vietnam’s fishery sector is confident of achieving more than US$9 billion in export turnover in 2021 due to incentives provided by free trade agreements to which Vietnam is a signatory

Big target

The fishery sector plays an important role in the national economy. Despite the impact of the Covid-19 pandemic, seafood exports reached US$8.4 billion in 2020, a drop of 1.8 percent compared with 2019, according to the Ministry of Agriculture and Rural Development.

Truong Dinh Hoe, secretary-general of the Vietnam Association of Seafood Exporters and Producers (VASEP), said Vietnam’s seafood exports plummeted in the first half of 2020, especially in March and May with a drop of 48 percent and 16 percent compared to the same month in 2019, respectively. By adapting to the new normal and devising response solutions, seafood exports recovered in the second half of the year. Shrimp exports maintained steady growth.

With experience in controlling the pandemic and utilization of free trade agreements to which Vietnam is a signatory, seafood exports are expected to increase by 10 percent in 2021 to US$9.4 billion. Of which, exports of shrimp, tra fish, and other fishery products are expected to reach US$4.4 billion, US$1.6 billion, and US$3.4 billion, a year-on-year increase of 15 percent, five percent, and six percent, respectively.

Ho Quoc Luc, board chairman of the Sao Ta Foods Joint Stock Company, said this year’s shrimp export target is expected to be completed due to high performance in farming, production and processing.

According to the BIDV Securities Company (BSC), demand for tra fish will return to the pre-pandemic levels because service channels such as restaurants and hotels still account for a large proportion of tra fish consumption.

Driving force for exports

The free trade agreements to which Vietnam is a signatory, especially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the United Kingdom-Vietnam Free Trade Agreement (UKVFTA), will help seafood exports thrive in 2021.

The entry into force of the EVFTA in August 2020 has already achieved results for Vietnam’s seafood exports. In the first seven months of 2020, seafood exports to the EU declined sharply with a drop of up to 26 percent. However, exports have increased significantly since August. In addition to adjustments to adapt to changing market demand due to the pandemic, the main factor leading to seafood export growth was attributed to a drop in import duties.

The CPTPP has also benefited Vietnam’s seafood exports. To Tuong Lan, deputy secretary-general of the VASEP, said Vietnam’s seafood exports to Canada only reached US$196 million in 2015, but increased to US$229 million in 2019 thanks to the effect of the CPTPP. Vietnam’s seafood exports to Canada increased by an estimated 20 percent in 2020 compared with 2019.

The UKVFTA offers great opportunities for Vietnamese seafood. Despite the impact of the Covid-19 pandemic, Vietnam’s seafood exports to the UK grew strongly in 2020. Specifically, in the first nine months of 2020, they increased by nearly 23 percent compared to the same period in 2019, reaching US$258 million. Of which, shrimp and tra fish exports increased by 19 percent and 27 percent, respectively.