Vietnam shipped its first batch of coffee to a number of European countries on September 16 following the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA), which will see coffee exports enjoy a preferential tariff of 0%.
Since the EVFTA was first implemented on August 1 this year, the EU has eliminated tariffs on all of the country’s unroasted or roasted coffee products from their previous levels of between 7% and 11%, while processed coffee will also enjoy a 0% tariff compared to the previous rate of 9% to 12%.
Simultaneously, the EU has also agreed to protect 39 Vietnamese geographical indications (GI) under the terms of the EVFTA, including the GI of coffee, which serves to give the Vietnamese coffee industry an advantage over other rivals trying to penetrate the EU market.
Vietnam, the world’s second largest coffee exporter, has taken the lead in terms of exporting Robusta coffee for many years. Its annual export turnover reaches over US$3 billion, accounting for 17.4% in volume and 9.5% of the world’s overall coffee export value.
Most notably, Vietnamese coffee has been marketed in more than 80 countries globally, with the EU becoming the largest consumer of the local product, making up 40% of the country’s total volume and 38% of total export turnover.
Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said that the domestic coffee industry has been a pioneer in public-private co-operation, ensuring sustainable development through the involvement of large Vietnamese and foreign corporations.
Over the past five years, Vietnam has replanted approximately 130,000 hectares of old coffee plants, exceeding the set target of 120,000 hectares.
The rate of coffee growing areas certified with sustainable cultivation methods has witnessed an increase of 60%, while the proportion of processed coffee rose from 5% in 2015 to 15% in 2020.
Vietnam and the EU inked the EVFTA in June 2019 and both parliaments ratified the trade deal early this year, paving the way for the deal to take effect on August 1. With preferential tariffs on offer, the enforcement of the EVFTA is expected to open wide the door for Vietnamese farm products to enter the EU market.
Over the past month, Vietnamese businesses have shipped first batches of rice and shrimp to the EU. Other agricultural products enjoying tariff cuts under the EVFTA include coffee, passion fruit, grapefruit, coconut, and dragon fruit.