On October 29, Prime Minister Pham Minh Chinh left the UAE for Saudi Arabia on a trip to three Middle Eastern countries.
With the Comprehensive Economic Partnership Agreement (CEPA), the market Middle East more open to Vietnamese goods thanks to tax reductions and extensive cooperation commitments.
With the signing of CEPA and the reduction of up to 99% of tax according to the roadmap, many of Vietnam's strong export products to the UAE in particular and the Middle East in general will have more advantages. Among them, advantageous products such as agriculture, especially high-quality agricultural products, clean and organic products with Halal certification, textiles, footwear, electronics, seafood, wooden products, etc.
Benefits of tax reduction
At a large supermarket in the capital Riyadh, many agricultural products from many countries are displayed on the shelves. A Saudi Arabian citizen chooses to buy fresh lemons from Vietnam. This person said that fresh Vietnamese lemons are not too big in size and have a lot of water, so he likes to buy them. However, compared to the markets of countries such as China, Thailand, Malaysia, etc., the presence of Vietnamese fruits in the Middle East is still quite modest.
Mr. Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, said that fruit export turnover to Saudi Arabia, UAE and other Middle Eastern countries is still modest but is growing positively. These countries prefer citrus fruits, with lots of water to cool down, such as oranges, lemons or fresh coconuts...
The advantage is that they do not require as high technical standards as the US and EU. While the US and EU require GlobalGap standards, the Middle East only requires a phytosanitary certificate and meets VietGap standards. In addition, customs clearance conditions and paperwork are much more favorable.
Vietnam's fruit export turnover to the UAE in 2023 is nearly 60 million USD, up 30% this year (the first nine months of the year reached 51 million USD), and to Saudi Arabia it reached 10.9 million USD.
Considered a niche market with great potential, it still faces many challenges. In fact, some businesses exporting to the Middle East are concerned that payment is not guaranteed, and that shipping across the Red Sea can be risky. Vietnamese fruits also have to compete with goods from China, Thailand, Malaysia, etc.
Capacity building requirements
According to the leader of the Department of Asian and African Markets (Ministry of Industry and Trade), the main export items from Vietnam include agricultural products (such as rice, pepper, coffee), processed foods and seafood which are strongly consumed in Saudi Arabia.
The country’s large demand for agricultural and food products, seafood and Halal food is an opportunity for Vietnam to boost exports. This is also a market with diverse needs for importing consumer products, industrial products and construction materials.
Meanwhile, with the advantage of being one of the major commercial centers in the Middle East, the UAE will also help Vietnamese businesses expand export channels and promote key products such as agricultural products, Halal food, seafood and consumer goods.
Although CEPA will support the growth of exports of Vietnam's key products, the leader of the Ministry of Industry and Trade noted that the Middle Eastern market is highly competitive, so Vietnamese enterprises must improve production capacity and meet stricter requirements on quality and Halal certification to capture the market.
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