Take advantage of opportunities to export agricultural products to the UAE.

In late October, the Vietnam-UAE Comprehensive Economic Partnership Agreement (CEPA) was signed, becoming the first free trade agreement Vietnam has signed with an Arab country. This is an important prerequisite for Vietnam to boost exports of its key products to the United Arab Emirates (UAE), including major agricultural products such as seafood, rice, fruits and vegetables, coffee, and pepper.

Fruit and vegetable exports have many growth opportunities in the UAE. (Photo: Processing watermelons at Thabico Tien Giang Food Industry Joint Stock Company. (Photo by Nguyen Su))

According to the Multilateral Trade Policy Department ( Ministry of Industry and Trade ), the UAE is currently one of Vietnam's leading trade and investment partners in the Middle East, serving as a gateway for Vietnam to access markets in the Middle East, as well as West Asia and Africa.

A market with great potential.

Statistics from the General Department of Customs show that, during the period 2018-2023, total trade between the two countries averaged approximately US$5 billion per year. Regarding the trade balance, Vietnam consistently maintains a large trade surplus with the UAE, ranging from US$3-4 billion per year. This result is partly due to the contributions of various agricultural sectors, as Vietnam's agricultural exports to the UAE have consistently shown growth in recent years.

According to the Vietnam Association of Seafood Processing and Export (VASEP), from 2018-2022, the UAE ranked 16th in shrimp imports from Vietnam, accounting for approximately 0.5% of the total value of Vietnamese shrimp exports to all markets. Each year, Vietnam's shrimp exports to the UAE reached approximately US$20 million.

Although small, this is a potential market because the demand for seafood, including shrimp, is increasing. Ms. Phung Thi Kim Thu - Shrimp market expert (VASEP) said: CEPE The signed agreement will open up more opportunities for shrimp exports to the UAE. In the first nine months of 2024, shrimp exports to this market reached US$7.4 million, accounting for 0.3% of total exports and showing a 34% increase compared to the same period in 2023.

Vietnam is also the largest supplier of pangasius to the UAE, accounting for 40-50% of the market share. The UAE has many factors that make it a suitable partner for Vietnam in the seafood trade, as its per capita seafood consumption is higher than the world average.

Because agriculture accounts for only about 1% of the UAE's economy, up to 90% of its seafood consumption is imported. On the other hand, a growing population, higher incomes, and the increasing interest and preference of young people for seafood protein, coupled with a surge in online searches for seafood products in recent years, create favorable conditions for seafood consumption in the country.

Furthermore, data from the Import-Export Department (Ministry of Industry and Trade) shows that in the first eight months of 2024, the UAE rose to become Vietnam's third largest pepper export market, after the US and Germany, with a volume of 11,779 tons, worth nearly $61 million, an increase of 30.5% in volume and 100.2% in value compared to the same period in 2023. Therefore, CEPA is expected to be a great opportunity for the Vietnamese pepper industry to increase its export turnover in this market.

Enhancing the competitiveness of agricultural products.

The CEPA agreement presents a significant opportunity for Vietnamese agricultural products to penetrate the UAE market, as the UAE has committed to phased tariff elimination on 99% of Vietnam's exports to the UAE; conversely, Vietnam has also committed to phased tariff elimination on 98.5% of UAE exports to Vietnam. The agreement also includes numerous provisions facilitating trade and investment, aligning with current trends in digital transformation and green development.

However, to effectively utilize the CEPA Agreement and increase exports of agricultural, forestry, and aquatic products to the UAE, Vietnamese agricultural sectors need to leverage their existing advantages and further improve product quality to enhance competitiveness; focusing on developing Halal agricultural and food products for Muslims.

According to VASEP, in the UAE, Vietnamese businesses have to compete directly with businesses from several countries that have signed FTAs with the UAE, such as India, Indonesia, Israel, and Türkiye. Specifically, for shrimp products, Vietnam has to compete with shrimp from India, China, and Ecuador.

While Indian shrimp accounts for nearly 60-70% of the market share, Vietnamese shrimp only holds about 5-7%. Therefore, in the future, along with taking advantage of tariff benefits, businesses need to change production and management methods, reduce intermediary costs to increase the competitiveness of their products; and promote the development of Halal certification systems for shrimp products when exporting to this market.

According to Truong Xuan Trung, First Secretary and Head of the Vietnamese Trade Office in the UAE, the UAE is becoming an attractive market for Vietnamese agricultural and food exporters. Although it is an open market with virtually no trade barriers, the UAE is a highly competitive market. Exported products must ensure food safety and hygiene, and the levels of chemicals and pesticides must not exceed permitted limits, not to mention a series of Halal regulations for imported food and beverages.

To support Vietnamese businesses exporting to the UAE, since the beginning of the year, the Vietnamese Trade Office in the UAE has implemented various trade promotion measures, such as: coordinating with the Dubai Chamber of Commerce to organize business delegations from Dubai in various sectors to Vietnam to participate in business forums; working with UAE supermarket chains such as West Zone, Choithrams, and other UAE distribution corporations to prepare for Vietnamese trade promotion delegations to meet and work with them; assisting several corporations and businesses in connecting with partners and verifying information about import partners in the UAE…

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