Tổng quan ngành xuất khẩu hồ tiêu việt nam trong bối cảnh evfta và kiến nghị cho ngành xuất khẩu hồ tiêu việt nam

Tóm tắt Kể từ khi chính thức có hiệu lực vào ngày 182020, hiệp định Thương mại Tự do Việt Nam – Liên minh Châu Âu (EVFTA) đã giúp thúc đẩy thương mại giữa các nước Châu Âu và Việt Nam thông qua các ưu đãi thuế quan đối với mặt hàng nông sản. Hiệp định không chỉ là tín hiệu đáng mừng cho ngành nông sản nói chung mà ngành hồ tiêu cả nước nói riêng. Bài nghiên cứu phân tích thực trạng ngành xuất khẩu hồ tiêu Việt Nam và những thách thức mà ngành phải đối mặt. Từ đó, nhóm tác giả đề xuất các kiến nghị cho ngành hồ tiêu để giảm thiểu những khó khăn và tận dụng tối đa những lợi thế mà EVFTA mang lại. Điều này đòi hỏi những nỗ lực phối hợp chặt chẽ của chính phủ với doanh nghiệp và hợp tác xã đối với ngành xuất khẩu hồ tiêu Việt Nam để sẵn sàng đáp ứng những nhu cầu từ thị trường Châu Âu. Từ khóa: xuất khẩu hồ tiêu, EVFTA, Châu Âu, hiệp định thương mại tự do

TỔNG QUAN NGÀNH XUẤT KHẨU HỒ TIÊU VIỆT NAM TRONG BỐI CẢNH EVFTA VÀ KIẾN NGHỊ CHO NGÀNH XUẤT KHẨU HỒ TIÊU VIỆT NAM Vũ Huyền Phương Giảng viên Viện Kinh tế Kinh doanh quốc tế Trường Đại học Ngoại thương, Hà Nội, Việt Nam Tóm tắt Kể từ thức có hiệu lực vào ngày 1/8/2020, hiệp định Thương mại Tự Việt Nam – Liên minh Châu Âu (EVFTA) giúp thúc đẩy thương mại nước Châu Âu Việt Nam thông qua ưu đãi thuế quan mặt hàng nông sản Hiệp định khơng tín hiệu đáng mừng cho ngành nơng sản nói chung mà ngành hồ tiêu nước nói riêng Bài nghiên cứu phân tích thực trạng ngành xuất hồ tiêu Việt Nam thách thức mà ngành phải đối mặt Từ đó, nhóm tác giả đề xuất kiến nghị cho ngành hồ tiêu để giảm thiểu khó khăn tận dụng tối đa lợi mà EVFTA mang lại Điều đòi hỏi nỗ lực phối hợp chặt chẽ phủ với doanh nghiệp hợp tác xã ngành xuất hồ tiêu Việt Nam để sẵn sàng đáp ứng nhu cầu từ thị trường Châu Âu Từ khóa: xuất hồ tiêu, EVFTA, Châu Âu, hiệp định thương mại tự Overview of Vietnam’s pepper export in the context of EVFTA and recommendations for Vietnam's pepper export industry Abstract Since its official implementation on August 1, 2020, the Vietnam EU Free Trade Agreement (EVFTA) has played a vital role in promoting trade between European countries and Vietnam, particularly in the agricultural sector In fact, this agreement has brought significant benefits to the national pepper sector Considering this, a study was conducted to scrutinize the existing circumstances and challenges confronting the Vietnamese pepper export industry Based on the findings, the author team has provided recommendations that can aid the industry in minimizing difficulties and maximizing the benefits brought about by EVFTA For this, it is essential for close cooperation between the government, enterprises, and cooperatives in the Vietnamese pepper export industry to meet the demands of the European market Keywords: pepper export, EVFTA, Europe, free trade agreement Introduction EVFTA is a historic trade deal that was signed between the European Union and Vietnam in June 2019 The agreement aims to enhance trade and investment between the two regions, eliminate tariffs, and create more jobs, particularly in agriculture With regards to pepper export, EVFTA's agriculture section provides significant opportunities for Vietnam However, to fully benefit from this agreement, Vietnam's pepper industry needs to improve the quality and safety standards to meet the EU's stringent requirements Additionally, the country should invest more in research and development activities to enhance the production capacity and improve the value chain of their pepper industry Literature review The European Union-Vietnam Free Trade Agreement (EVFTA) is an important trade agreement between the EU and Vietnam It covers a wide range of sectors, including agriculture, and aims to promote trade liberalization, investment, and economic growth Vietnam's pepper export has been an important contributor to its economy, and the EVFTA provides an opportunity for the industry to expand its market access to the EU The EU will eliminate tariffs on 99% of Vietnamese exports immediately and gradually reduce them for the rest (EU-Vietnam agreement) Hiezle Bual (Dec 2022) concluded that the EU and US are the largest importers of black pepper in the world Vietnam is expected to export 220,000 metric tons of pepper, accounting for 55% of the world's pepper output The elimination of tariffs on pepper exports to the EU will benefit Vietnam's pepper industry, making it more competitive in the EU market and increasing its export and investment opportunities Nhan Dan Daily (March, 2019) reported that the agreement provides for the protection of geographical indications (GI) for agricultural products, including pepper The protection of GIs will allow Vietnam to market its pepper products in the EU with a guaranteed quality label, protecting against cheap imitations and promoting Vietnamese pepper products in the EU market Nguyen & Trinh (May, 2020) concluded that the EFTA has positive impacts on the export of agricultural products to the EU by helping the total value rise by over USD 37.532 million However, the implementation of the agreement may also have some challenges for Vietnam's pepper industry The requirements for food safety and sanitation standards in the EU may be higher than those currently implemented in Vietnam To meet the EU's standards, the Vietnamese government and pepper producers need to invest in improving food safety and quality control measures Ngo & Nguyen (August, 2022) stated that Small and medium-sized businesses in Vietnam should be the primary focus of industry development initiatives More money needs to be spent by the Vietnamese government on raising production standards and procedures as well as developing commodity classification requirements for some important agricultural crops Hiezle Bual (Dec 2022) concluded that the EU and US are the largest importers of black pepper in the world Vietnam is expected to export 220,000 metric tons of pepper, accounting for 55% of the world's pepper output The elimination of tariffs on pepper exports to the EU will benefit Vietnam's pepper industry, making it more competitive in the EU market and increasing its export and investment opportunities Nguyen & Trinh (2020) advised domestic companies that specialize in exporting agricultural products to consistently raise the quality of their offerings so that Vietnamese products will eventually satisfy the Global GAP standard and be more competitive Buying their value chains is the greatest approach for exporters to manage product quality Additionally, as dried, prepared fruits and vegetables are the most promising items when EFTA goes into operation, processors with money and resource potential should modernize their processing techniques In short, the implementation of the EVFTA's agriculture section provides an opportunity for Vietnam's pepper industry to expand its market access to the EU However, this opportunity also comes with challenges in meeting higher EU food safety and sanitation standards Vietnam needs to invest in improving quality control measures to meet these standards and take advantage of the opportunities offered by the agreement 1 Theoretical framework 1.1 Introduction to the EVFTA The European Union-Vietnam Free Trade Agreement was signed in June 2019 and officially came into effect in August 2020 It aims to promote trade and investment between the EU and Vietnam by eliminating tariffs, establishing a predictable and transparent legal framework, and promoting sustainable development It eliminates over 99% of tariffs on goods traded between Vietnam and the EU, making it the most comprehensive free trade agreement between the EU and a developing country The main content of the European Union-Vietnam Free Trade Agreement (EVFTA) includes the following: Tariff elimination: The agreement aims to eliminate tariffs on almost all goods between Vietnam and the EU over a period of time, with some exceptions such as agricultural products Non-tariff barriers: The EVFTA includes measures to reduce and eliminate nontariff barriers, such as technical regulations and standards, to facilitate trade between the two sides Services and investment: The agreement also covers services and investment, including market access and treatment, investment protection, and dispute settlement mechanisms Intellectual property rights: The EVFTA includes provisions to protect intellectual property rights, including trademarks, copyrights, and patents Government procurement: The agreement also includes provisions on government procurement, which will allow EU companies to participate in public tenders in Vietnam on an equal footing with local firms Sustainable development: The EVFTA includes provisions on sustainable development, including commitments to promote sustainable and responsible business practices, protect the environment, and respect labor rights Dispute settlement: The agreement establishes a dispute settlement mechanism to resolve any disagreements or disputes arising from the interpretation or implementation of the agreement Overall, the EVFTA aims to strengthen trade and investment ties between Vietnam and the EU, and to create new opportunities for businesses on both sides The agriculture section of the EVFTA is an essential aspect of the agreement, as it covers a wide range of agricultural products, including pepper Pepper is among the most crucial agricultural export products in Vietnam, and the country is one of the world's leading producers and exporters of black and white pepper EVFTA provides substantial opportunities for Vietnam's exports of agricultural products to the EU market Tariffs on key Vietnamese agricultural exports, including pepper, seafood, coffee, and tea, are expected to decrease significantly over time 1.2 Vietnam's pepper export industry 1.2.1 Introduction of pepper products in Vietnam In the seventeenth century, Vietnamese pepper emerged as a significant crop in Vietnam In recent years, there has been a growing demand for high-quality pepper, particularly from the European Union (EU) market Consequently, Vietnam's pepper exports' value increased from 752 million USD in 2018 to 925 million USD in 2021 (Trade map), eventually becoming a dominant force in both the country's agriculture and the global market Vietnamese pepper has flourished due to several favorable conditions, including abundant natural resources such as fertile basalt soil, a subtropical climate with high humidity and rainfall, diligent and eager-to-learn Vietnamese farmers, government support for farming investments and technology and the effective operation of the Vietnam Pepper Association, a non-profit organization dedicated to the development of the pepper industry However, there are challenges that Vietnam's pepper industry faces Weather fluctuations, pests, and diseases pose risks to crop yields and quality Limited market access, low quality and safety standards, and weak supply chain management are also significant obstacles Vietnam's pepper exports face difficulties due to competition from pepper produced in Brazil and India, as well as the impact of the COVID-19 pandemic on export volumes to American and European markets 1.2.2 The significance of pepper export for Vietnam's economy Vietnam's pepper industry remains a crucial component of the country's economy, serving as a prominent export commodity and ranking among the top ten agricultural exports The Central Highlands region, where pepper is a major cash crop, particularly benefits from this industry and relies on it as a significant income source The export of pepper also contributes to Vietnam's trade surplus, which has been consistently growing in recent years In 2020, Vietnam recorded a trade surplus of 19.1 billion USD, with total exports turnover of goods reaching 281.5 billion USD and imports turnover of goods amounting to 262.4 billion USD Pepper played a vital role in this surplus as one of the top ten agricultural exports (General Statistics Office of Viet Nam) Its export value in 2021 stood at 925 million USD, further contributing to the country's overall trade surplus Moreover, the pepper industry holds significant importance within Vietnam's agricultural sector as a whole Vietnam ranks as the world's sixth-largest exporter of agricultural products, with the sector contributing approximately 14% to the country's GDP The Vietnamese government has actively promoted the development of high-value agricultural goods, including pepper, to enhance the sector's contribution to the national economy 1.2.3 Vietnam's pepper export performance to other countries Vietnam has emerged as one of the largest global producers and exporters of pepper, playing a significant role in the international pepper trade The country's pepper exports have been steadily increasing, and it has been diversifying its market presence beyond its traditional trading partners In 2020, the European Union (EU) remained a crucial market for Vietnamese pepper exports, accounting for approximately 17% of the total export value Additionally, the United States, India, and China are major markets for Vietnamese pepper Vietnam's pepper exports to the US reached 143 million USD in 2020, making it the largest non-EU market for Vietnamese pepper (Figure 1) Figure List of five markets importing the most export products of Vietnam - Source: Trade map Vietnam has also been expanding its pepper exports to other Southeast Asian countries, including Philippines, Malaysia, and Thailand The export figures to Thailand and Philippines in 2020 were 16 million USD and 15 million USD (Trade map), respectively, indicating a notable increase compared to previous years The country's efforts to develop new markets for Vietnamese pepper have resulted in positive export performance Furthermore, Vietnam has made significant improvements in the quality and safety of its pepper through the implementation of measures to enhance production and processing standards This has led to a growing demand for Vietnamese pepper in global markets, particularly in the EU, where the European Union-Vietnam Free Trade Agreement (EVFTA) has facilitated easier access for Vietnamese pepper 1.2.4 The demand of consuming pepper of the EU’s population Black pepper holds a significant position as a highly consumed spice in Europe It plays a crucial role in various dishes and has maintained its popularity over time due to its unique qualities, making it irreplaceable Therefore, pepper is named as "the king of spices" in European cuisine Europe heavily relies on imports to meet its demand for black pepper since it does not produce this spice domestically As the largest importers globally, both Europe and the USA together account for approximately one third of the world's black pepper imports European imports of black pepper have witnessed a stable increase, with an annual growth rate of 5% since 2016, reaching 76.7 thousand tons in 2020 (CBI Ministry of Foreign Affairs) Within Europe, around half of the internal trade consists of reexports of black pepper originating from producing countries, while the other half includes processed (ground) pepper The consumption of black pepper in Europe is projected to continue growing steadily, aligned with the population growth of the region Over the next two years, imports are expected to rise with an annual growth rate of 1-2% European markets offer a price advantage for exporters of high-quality and sustainably produced black pepper compared to Asian markets For instance, Vietnam's average export unit value to Germany, the largest European market, was 10% higher than that to the USA and 20% higher than to China in 2019 and 2020 (CBI Ministry of Foreign Affairs) Figure European imports of pepper by origin (in tons) - Source: CBI Ministry of Foreign Affairs Analysis of Vietnam’s pepper export industry and EVFTA agreement 2.1 Vietnam's pepper exports before the signing of the EVFTA agreement 2.1.1 The status of Vietnam’s pepper produced before the EVFTA In terms of pepper production and export, Vietnam has consistently ranked first in the globe Implement crop restructuring in the direction of agricultural sector restructuring, whereby the goal for pepper in the period 2016-2020 is to stabilize an area of about 98 thousand hectares, primarily concentrated in advantageous regions (Southeast, Central Highlands), and intensive farming to improve productivity and product quality In 2010, there were just 51.3 thousand hectares of pepper farming (General Statistics Office, 2021) However, due to the continual growth in pepper prices from 2010 to 2016, individuals concentrated on massively increasing the planting area, leading the pepper area in the entire nation to increase fast, and certain areas developed "hottest." This leads to over planning The pepper acreage reached 101.6 thousand hectares in 2015, nearly double that in 2010 The area of pepper increased sharply in 2017, 2018, the highest reached over 150 thousand hectares in 2017, then due to price decrease and instability, by 2020 it will be 131.8 thousand hectares, an increase of 30.2 thousand hectares over the previous year and an increase of 80.5 thousand hectares over 2010 (General Statistics Office, 2021) During the pepper price boom, the planted area expanded far too rapidly, even in places unsuitable for pepper cultivation Many people cultivate pepper; however, it can only be harvested after 3-4 years When pepper is harvested, it is also the period when pepper prices fall, so efficiency is low, and farmers abandon the garden without caring for it, diminishing production and quality of pepper goods and harming the Vietnamese pepper brand in the market 2.1.2 The status of Vietnam’s pepper export before the EVFTA Vietnam accounts for more than 40% of global pepper output and approximately 60% of global pepper export market share The remaining 5% of Vietnam's pepper volume is consumed in the local market Pepper prices peaked in 2015 and 2016, with an average of 8000-9500 USD gained per ton of exporting pepper Since 2016, pepper prices have steadily declined, leaving producers with little or no care and no pest management, resulting in poor production, quality, and efficiency (Figure 3) Figure 3: List of importing markets from European Union (EU 27) for a product export by Viet Nam – Trade map By 2019-2020, each ton of pepper for export will only earn 2,300-2,500 USD on average At this pricing, pepper producers confront several challenges, including losses and the inability to repay loans acquired to engage in pepper planting Domestic and export pepper prices grew steadily in the early months of 2021 Pepper is slowly improving after a lengthy period of decline This is encouraging news for the pepper sector as a whole, and for pepper producers in particular Despite ranking first in the world in pepper production, Vietnam faces several uncertainties and is not sustainable Vietnam sold pepper to 105 countries and territories, with the largest export turnover in 2016 of 1,429.2 million USD, then steadily declining in 2017, 2018, 2019, and 2020 to just 660,6 million USD, while the export volume hit a high of 285.3 thousand tons 2.2 Vietnam's pepper exports after the signing of the EVFTA agreement After the EVFTA came into effect, pepper export volume to international markets decreased, but export value increased And Vietnam still remained one of the biggest pepper exporters in the world According to data from Vietnam Customs, the export volume in 2020 reached 285,292 tons, but the value was only 660,569 million USD In 2021, the export volume decreased to 260,000 tons - decreased for the first time in years since 2015, but the turnover increased significantly Pepper output decreased by 9% but export value increased by 42%, reaching a total value of about 950 million USD After a four-year decline in value, Vietnam's pepper export price increased substantially again in 2021, rising 55.2% (equivalent to 1,278 USD per ton) over 2020 to an average of 3,593 USD per ton (Table 1) Viet Nam’s pepper export (2019 - 2022) Year of export Total +/- compare to the previous year (%) Volume (ton) Value (USD) Volume Value 2019 283.836 714.139.034 21.9 -5.9 2020 285.292 660.568.955 0.4 -7.5 2021 260.989 937.849.671 -8.5 42 2022 228.699 970.609.098 -12.4 3.5 Table Viet Nam’s pepper export (2019 - 2022) - Source: Vietnam Customs The worldwide pepper market has been challenging since the third phase of 2022 due to low demand and falling prices The downtrend lasted until October 2022 due to high inflation and slow consumption demand despite abundant supply According to Vietnam Customs, Vietnam's pepper exports in the third quarter of 2022 were 51.57 thousand tons, valued at 213 million USD, a 27% decrease in volume and a 31.8% decrease in value By the end of 2022, the export volume continued to decrease by 12% to 230,000 tons, but the export turnover increased by 4%, reaching 970 million USD compared to 2021 (Table 1) Besides the rising value factor, Vietnam's pepper export structure has improved in a good direction, gradually shifting to exporting highly processed pepper instead of raw export as before Previously, whole-grain black pepper was the most exported, but the share of this pepper in total exports in 2021 has decreased from about 80% to about 6467% Instead, the ratio of ground black pepper, white pepper was greatly increased By 2022, whole black pepper was still the most exported type of our country in 2022, accounting for 71.9% of the proportion, ground black pepper comes in second with 14.4%, whole white pepper comes in third with 8.89%, the remaining 4.1% is ground white pepper and 0.8% is other (Table 2) Type of pepper 2021 2022 Whole black peppercorn 64.2% 71.9% Ground black pepper 19.2% 14.4% Whole white peppercorn 9.2% 8.8% Ground white pepper 6.6% 4.1% Other 0.8% 0.8% Table The proportion of Vietnam's exported pepper by volume (2021 - 2022) Source: Vietnam Pepper Association In recent times, Vietnam's pepper exports to many key markets such as the United States, EU, China, etc have decreased due to inflation and reduction in demand According to data from the Vietnam Customs, the US is still Vietnam's largest pepper export market in the past year with a volume of 57,809 tons, down 2.5%, UAE: 15,195 tons, down 3.4%, Germany: 9,907 tons, down 15.8%, Netherlands: 9,047 tons, down 10.1%, etc The Chinese market was closed to prevent the COVID-19 epidemic, causing a decrease in pepper exports to Vietnam's second largest market, according to VPA data, pepper exports to China recorded the strongest decline, with a decrease of 46.4% (equivalent to a decrease of 17,761 tons) compared to 2021, to 20,498 tons Some other big markets also saw a decrease in imports such as: Pakistan down 49.5%, Egypt down 43.9%, France down 39.8%, Korea down 4.8%, etc However, exports to a number of markets tend to increase such as: the Philippines up 5.2%, Thailand up 10.1%, Japan up 34.1%, especially the domestic market And although Russia is being affected by the East-European conflict, Vietnam's pepper exports to this market still increased by 22.6% to 6,380 tons (Table 3) Export 2021 2022 +/- compare of market 2021 to 2022 (%) Volume (ton) Value (USD) Volume (ton) Value (USD) Volume Value USA 59.280 229.005 57.809 282.202 -2.5 +23.3 China 38.259 89.977 20.498 44.625 - 46.4 -50.3 UAE 15.723 56.062 15.195 61.870 -3.4 +10.4 Egypt 6/037 22.922 3.385 12.521 -43.9 -45.4 Germany 11.761 52.048 9.907 50.256 -15.8 -3.4 Netherlands 10.062 43.475 9.047 47.484 -10.1 +9.2 Russia 5.204 19.399 6.380 23.709 +22.6 +22.2 Korea 6.263 23.978 5.963 26.424 -4.8 +10.2 Pakistan 10.224 34.616 5.161 18.913 -49.5 45.4 Japan 3.805 11.858 5.101 18.968 +34.1 +60.0 Thailand 4.842 22.413 5.331 26.136 +10.1 +16.6 Table Vietnam global export in 2022 - Source: Vietnam Customs and Vietnam Pepper Association In the context of general difficulties, the results achieved are remarkable successes of the pepper industry, showing that the Vietnamese pepper industry is gradually gaining a foothold in the world value chain 2.3 Evaluation of Vietnam’s pepper exports to the EU The EU is one of the biggest pepper imports in the world According to the Vietnam Pepper Association (VPA), the total import volume of pepper to the EU in the first months of 2022 reached nearly 70,000 tons, the average EU imports over 10,000 tons per month, with a total import value of nearly 388 million USD In addition, with more than 500 million customers, the EU is the largest trading region in the world with an average GDP growth rate of 0.9% per year (Lam Ngoc, 2023) Pepper is currently the most important and most widely eaten spice in Europe According to VPA and information from the International Pepper Community (IPC), Germany is the largest importer in Europe, accounting for 30% of the market, followed by the Netherlands (11%), France (11%), Poland (6%) and Spain (5.6%) (Son Trang, 2022) Because the European market has great demand, exporting pepper will be a huge advantage for Vietnam, especially in the context that Vietnam has signed the EVFTA agreement with the EU However, the output of pepper that Vietnam exported to Europe has not made significant progress after the EVFTA was signed The US and Asia are still the two leading pepper export regions of Vietnam: Asia (accounting for 44% of the total pepper export volume market share), followed by the US (26.4%), the EU (23.9%), and Africa (5.3%) (Vu Khue, 2022) In the figure below, we can also see that Vietnam ranked second in the EU import market in 2021 with 16.4% market share Figure Where the EU imported pepper from (2021) - Source: OEC There are reasons why Vietnam has not made a breakthrough in pepper exports to Europe even though Vietnam has signed the EVFTA agreement with the EU According to Mr Le Viet Anh, Chief of Office of the VPA, stated that during this time, the climate change affected farming and the production of pepper and spices, the state of pests and illnesses, the breed is still hybrid, but there is no purebred variety, and the high cost of input items such as pharmaceuticals, fertilizers, labor, freight, and fuel has an impact on the profits of businesses and farmers (Vu Khue, 2022) Ms Nguyen Nhat Minh representative of Vietnam Insight Company, also indicated that pepper farmers intercropped pepper with other crops including coffee and durian and did not closely manage pesticide and pesticide residues, resulting in many export shipments being recalled (Lam Ngoc, 2023) All of this has a significant impact on productivity and quality of the product, meanwhile competition among producing countries such as Brazil, Indonesia, and Cambodia is increasing as the quality of pepper in these countries becomes stronger and more competitive than that of Vietnam Vietnamese pepper products also face increasing technical barriers of the European market, regulations on pesticide residues are continuously enforced to a lesser extent, creating challenges for businesses, according to Mr Le Viet Anh (Vu Khue, 2022) Vietnam's poor quality products will certainly be lowered in price, which causes a decrease in the value of pepper despite the abundant supply A few other objective reasons given by Mr Le Viet Anh are conflicts in Eastern Europe, rising oil prices, economic inflation impacted worldwide demand, resulting in a decline in pepper and spice imports (Vu Khue, 2022) Opportunities and Challenges for Vietnam's pepper export industry 3.1 Opportunities for Vietnam's pepper export industry Thanks to the effective EVFTA, the tariff preferences will open up opportunities for Vietnamese pepper to access a sizable and potential market Besides, Vietnam is one of four Asian countries that have free trade agreements with the EU (along with Japan, Korea, and Singapore) Thus, Vietnam has more advantages than some pepper producing countries such as Indonesia, India, and Malaysia Firstly, it is the tariff advantage Numerous Vietnamese agricultural products will benefit from the tax reduction to 0%, including pepper products (HS code 0904), when EVFTA goes into effect The functional EVFTA will be a good lever for Vietnamese enterprises to enhance pepper exports to EU countries Particularly for pepper products, according to tariff regulations imposed by the EU, the duty on crushed or ground pepper and neither crushed nor ground pepper were cut down to 4% and 0%, respectively, from the date of entry into force of the Agreement (Annex 2.1 EVFTA) While the pepper application rate was previously at 5-9%, the tariff reduction provides a favorable opportunity for Vietnam to compete on price with Brazil, Indonesia, and India in the EU market Secondly, pepper, as well as other agricultural exports from Vietnam, are subject to uniform standards Before the implementation of the EVFTA, pepper exporters to the EU market had to comply with the national standards of each country; now, they are required to follow the shared norms of the entire bloc Besides, European investors are considering transferring processing factories to Vietnam to take advantage of raw materials and cheap labor Consequently, Vietnam can accumulate experience, science, and technology from the EU Additionally, it will create a driving force to promote pepper exports to various EU markets Thirdly, it is about intellectual property The EU is committed to protecting 39 geographical indications of Vietnam related to agricultural products and well-known foods with significant export potential Therefore, pepper goods stand a chance to trace their origin and ensure their quality and safety to European citizens Besides, it is a great way to promote and position their brands in foreign markets 3.2 Challenges for Vietnam's pepper export industry Despite lower tariffs, non-tariff barriers still exist, which presents a considerable obstacle for pepper exports to the EU market According to Nguyen Thi Thu Trang, Director of the WTO Integration Center under the Vietnam Chamber of Commerce and Industry (VCCI), it will be challenging to obtain preferred rules of origin, especially for agricultural products She also argues that FTA commitments not act as an export licenses or visas for commodities Firstly, there are high regulations about technology and processes comprising technical barriers in trade (TBT) and Sanitary and Phytosanitary Measures (SPS) The technical impediments to Vietnam's pepper exports to the EU are now rising, particularly in light of the country's repeated warnings concerning pesticide residues on pepper Typically, there is an issue of metalaxyl chemical residues on pepper imported into the European market According to VCCI, the European Commission (EC) adjusted the maximum residue limit of Metalaxyl chemical on imported pepper from 0.1 ppm to 0.05 ppm Consequently, only 46% of the pepper was eligible for export to Europe in 2018 Furthermore, by October 2020, in February 2020, the regulation on the reduction of Maximum Residue Levels (MRL) for chlorpyrifos and chlorpyrifos-methyl to a lower detection threshold of 0.01 mg/kg, came into force Thus, farmers must look for other biopesticides to replace chlorpyrifos at a much higher cost if they want to keep their yields while the transition time is too short Secondly, there is a lack of data for traceability Currently, the risk of traceability for imported products from third markets exists for both pepper and other agricultural products of Vietnam About 10% of Vietnam's total pepper exports imports from other producing nations, primarily used for processing The market pricing is unstable, the quality of pepper for export is still subpar, and Vietnam has not concentrated on product traceability As a result, consumers will raise suspicion about the quality and safety of Vietnamese pepper, which in turn can impact the Vietnamese pepper product's competitiveness in the EU market to some extent Thirdly, there are still some limitations on the production, harvesting, and processing of Vietnamese pepper: The majority of pepper types are still floating, and the quality regulation is still insufficient; Exploding the pepper region beyond the planning, causing the risk of unsustainable development; Small-scale, fragmented, and unconnected production; Abuse of inorganic fertilizers and pesticides still occur, triggering a serious deterioration in soil fertility, low pH, destruction of beneficial microorganisms, poor resistance of pepper, and root disease outbreaks; Manual collection and inadequate postharvest preservation; Poor product quality management, no brand name; Preliminarily processed pepper captures a high proportion, estimated at more than 80% of total pepper export turnover Therefore, Vietnamese pepper's export value and competitive edge are still low In conclusion, the most significant challenge to Vietnam’s pepper export is to enhance product quality The European market is increasingly tightening the quality restriction on pepper products by lowering the maximum residue limit Besides, the authority has not strictly regulated the origin of the pepper, and the cultivation, harvesting, and processing methods are still substandard Hence, the Vietnamese pepper quality is still inferior to the competitors’, which requires pepper farmers, businesses, and the government to tackle timely Recommendations for improving Vietnam's pepper export industry To maximize the industry's potential and ensure sustained growth, the government and pepper enterprises need to work together Farmers must be placed at the center and farmers need to improve their farming knowledge Besides, it is necessary to cooperate with enterprises in the pepper industry by encouraging businesses to work closely and associate with cooperatives, farmers and authorities 4.1 To the government Firstly, as the demand for high-quality and sustainable pepper production increases, governments have a responsibility to support farmers in adopting sustainable agriculture practices The use of sustainable agricultural practices improves the quality of pepper production by reducing the negative impact on the environment and human health Hence, governments should increase their support for farmers by providing quality seeds and fertilizers that can lead to higher yields and better-quality pepper Secondly, the government should strengthen support for export activities, including providing market information, sponsoring participation in international trade fairs, and building relationships with trading partners Additionally, efforts should be made to develop brands and enhance market access, allowing farmers to access potential export markets Thirdly, the government should create a more favorable business environment for these exporters by streamlining administrative procedures, reducing red tape, and improving infrastructure By reducing the amount of bureaucracy involved in exporting peppers, the government can make it easier for businesses to operate This could include simplifying the process of obtaining export licenses, improving customs procedures, and reducing the number of regulatory bodies involved in the export process Additionally, improving infrastructure and transportation networks can greatly reduce the time and costs associated with exporting goods 4.2 To the Vietnamese pepper enterprises Firstly, Vietnamese pepper enterprises should invest in modern technologies for farming, harvesting, processing, and packaging pepper Technologies can help them produce high-quality pepper and increase productivity while saving time and money They can also enable them to manufacture value-added products from pepper such as pepper oil, pepper paste, and pepper sauce Developing innovative products can help businesses generate higher profits and enter new markets Secondly, pepper enterprises need to invest in sustainable and environmentally friendly farming practices to promote a healthy agricultural system It is essential to reduce the number of chemical drugs and switch to using biological products and organic fertilizers that both increase plant resistance and reduce the attack of nematodes on plants This practice can lead to better crop yields and quality, making profit increase in the long term Thirdly, it is necessary to improve quality control measures to ensure the safety and quality of exports Pepper processing facilities should implement strict quality control measures at every stage of production, from cultivation to processing and storage Meeting international safety and hygiene standards not only improves the reputation of Vietnamese pepper exports but also increases consumer confidence in the product Moreover, regular inspections and audits can ensure that quality control measures are being implemented effectively Fourthly, Pepper enterprises should focus on building strong relationships with existing customers and identifying new markets Vietnamese pepper exporters should work closely with their customers to understand their preferences and needs, as well as explore new markets and potential customers to help grow businesses by actively participating in specialized international fairs and international spice associations Fifthly, Pepper enterprises should adopt and enforce strict adherence to GAP guidelines This includes proper pesticide and fertilizer management, following the recommended dosage and waiting periods, and implementing integrated pest management practices By implementing GAP, enterprises can minimize the use of chemicals and reduce the risk of excessive chemical residues 4.3 To the cooperatives Firstly, Cooperatives should organize training programs and workshops to raise awareness among farmers about the potential risks associated with excessive chemical use Educating farmers about the importance of following the recommended dosage, proper application techniques, and appropriate withdrawal periods can help prevent chemical residues in pepper Promoting sustainable farming practices and adhering to GAP guidelines can help minimize the use of harmful chemicals and reduce the risk of chemical residues in agricultural products Secondly, Cooperatives and farmers need to invest in building a system for monitoring and traceability of pepper products This will enhance the ability to trace information about the origin, production processes, and quality of pepper Through traceability, farmers and cooperatives can provide accurate product information to customers and importers, building trust and adding value Thirdly, Cooperatives can encourage farmers to transition to organic farming practices Organic farming relies on natural inputs and sustainable techniques to manage pests and diseases, reducing the use of synthetic chemicals By promoting organic farming, cooperatives can offer organic-certified pepper, which has high demand in the European market Fourthly, Cooperatives can promote the adoption of IPM (Integrated pest management) strategies among farmers IPM focuses on using a combination of cultural, biological, and chemical control methods to manage pests and diseases effectively By implementing IPM, farmers can reduce their reliance on chemical pesticides, minimizing the risk of chemical residues Conclusion The Vietnam-EU Free Trade Agreement (EVFTA) was concluded in the spirit of comprehensive cooperation and balancing of interests between Vietnam and the European Union (EU) This is one of the new generation FTAs that is projected to provide strategic benefits to Vietnam by fostering future trade-investment links with one of Vietnam's largest and most significant partners Vietnamese pepper has several chances to increase exports as a result of the EVFTA Agreement Currently, only four Asian nations have signed FTAs with Europe: Japan, Korea, Singapore, and Vietnam This demonstrates Vietnam's competitive edge over other pepper-producing nations such as Indonesia, Malaysia, India, and others However, experts believe that in order for Vietnam to remain the world's top pepper exporter, it must improve business competitiveness; promote production linkages with cooperatives and farmers to create a stable and sustainable source of raw materials; and meet pesticide residue levels as well as food safety regulations Commodity standards in the European Union (EU) In addition, pepper producers must shift their production mindset toward sustainable growth, not chasing output but rather boosting the quality of post-harvest goods, while also engaging in cooperatives and complexes Collaboration to connect production with businesses References Bual, H (2022a) How Vietnam Became The World’s Largest Pepper Exporter [online] Vietcetera Available 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