(HSV VIETNAM GROUP) – Agricultural product export plays an important role in socio-economic development, especially in developing countries, to stimulate economic growth, increase national income and create jobs. The article studies the experiences of Thailand and India in overcoming tariff and non-tariff barriers in the context of implementing free trade agreements to promote agricultural exports, from which some experiences are drawn for Vietnam.
Exporting agricultural products is a foreign economic activity that takes place in most countries around the world. However, up to now, the implementation of this activity under the conditions of implementing signed free trade agreements has not yet fully exploited its potential. The most important issue is to overcome non-tariff barriers and ensure food safety regulations, such as the Agreement on food hygiene and safety and animal and plant quarantine (SPS), Agreement on technical barriers in trade...
Experience in exporting Thai agricultural products to the EU market
Thailand and Vietnam are two countries located in the Mekong sub-region, with similar natural conditions in geography, climate, soil and resources to develop agricultural production, such as an abundant labor force.
Thailand is a traditional agricultural country with a wet rice civilization, tropical climate, and many advantages for agricultural production such as sugarcane, rice, rubber, corn and many tropical fruits such as mango, pineapple, guava...
Thailand is one of the leading countries in the production and export of agricultural products in areas such as fisheries, crops and livestock. In particular, Thailand has for many years led the world in rice exports.
Thailand's agricultural exports have achieved positive results because the Thai Government has focused on implementing policies to support agricultural production and promote agricultural exports to international markets.
Thailand identifies agriculture and rural areas as the backbone of the country, a field that helps escape lagging behind. Since the 1970s, Thailand has implemented an "export-oriented" policy, with the main markets being ASEAN, the US, Japan, and the EC. In the 5-year plan 1977-1981, the Thai Government implemented a strategy to modernize agriculture, advocating diversifying the economy towards export, maintaining the contribution of the agricultural sector in the economy (3).
To expand agricultural export activities, Thailand has carefully prepared to overcome non-tariff barriers such as barriers on food hygiene and safety and animal and plant quarantine (SPS), technical barriers (TBT), anti-dumping (ADP), export subsidies (XS), special safeguards (SSG) and tariff quotas (TRQ). Specifically:
Firstly, consider varieties as one of the steps to create sustainable comparative advantages when bringing agricultural products into the world market. The principles of the variety are: clear origin, address, instructions on intensive farming process, proof that the variety has been grown experimentally and has had good results. The government imposes heavy sanctions if seed suppliers intentionally violate regulations or provide seeds of substandard quality. The government spends a significant budget to import seeds; Support research agencies in selecting and breeding good varieties; Subsidy for the dissemination of good varieties.
Second, focus on scientifically diversifying the types of agricultural products, both to help satisfy consumer demand and reduce competition in consumption due to intensive and duplicate farming of the same agricultural product in different regions.
Third, focus on investing in modern processing technology lines, ensuring transportation conditions, advanced packaging techniques, and satisfying the quality requirements of the EU, US, Japan, China...
Fourth, Thailand is a country with a large number of tourists, agricultural traders have taken advantage of this to export on the spot with a significant turnover. Every year, Thailand welcomes about 15 million tourists, each visitor buys an average of 5 USD of agricultural products, mainly fruit, with sales reaching about 75 million USD. This is an effective form of marketing(4).
Fifth, build close links between functional agencies related to agricultural export activities: establish agencies and branches under the agricultural sector to provide services for agricultural export, such as: providing plant and food quarantine certificates in key agricultural production areas; Help businesses control the quality of exported agricultural products; Established a Thai packaging center under the Ministry of Science and Energy to provide guidance on appropriate packaging for agricultural products, ensuring quality is maintained.
Sixth, support farmers to produce and export high-value agricultural products: The Ministry of Agriculture supports farmers in researching, choosing good plant varieties, improving soil and irrigation systems to improve productivity and quality of agricultural products; The Ministry of Trade supports exporters through trade promotion and market expansion activities.
India's agricultural product export experience
India is a country located in Southwest Asia with an area of nearly 33 million square kilometers, of which 141.23 million hectares is agricultural land. The rich river system with large water flow has created the largest deltas in the world. From there, create favorable conditions for the cultivation and production of diverse and abundant food crops, contributing to the formation and development of prosperous economic regions. Along with favorable natural conditions and a population of over 1 billion people, India is also a country with strong labor resources to develop the agricultural industry. Those potentials and advantages have contributed to helping India become one of the world's leading producers and suppliers of grains, sugar, milk, vegetables, spices, eggs and seafood.
In 2019, according to WTO data, India was one of the 10 largest agricultural exporters in the world, accounting for 2.1% of total global agricultural export turnover. In 2022, India's total agricultural export turnover will reach 49.6 billion USD, an increase of 20% compared to 41.3 billion USD in 2021. Of which, rice is India's largest agricultural export and contributes more than 19% of total agricultural export turnover in 2022. Sugar, spices and buffalo meat are large export items with contribution proportions of 9%, 8% and 8% respectively. 7% of agricultural export turnover in the 2021-2022 period. Wheat exports reached a value of 2.1 billion USD in 2022, a significant increase from 568 million USD in 2021. Coffee exports exceeded the 1 billion USD mark for the first time. Seafood exports reached 7.7 billion USD(5).
India maintains its position in the top 10 largest agricultural exporters in the world because the Government has implemented policy initiatives to promote agricultural exports.
The Indian government has issued an agricultural export policy with the goal of achieving agricultural export turnover of 60 billion USD or more by 2022, aiming to reach 100 billion USD in the coming years; diversify export markets and promote the export of agricultural products with high value and added value; promote the export of organic agricultural products and local specialties; providing mechanisms for agricultural products to access the market, overcoming hygiene and quarantine barriers; double the proportion in the global value chain; create conditions for farmers to take advantage of export opportunities to international markets. Specific implementation measures are:
Firstly, develop local agricultural products and promote added value. Items in the list of local agricultural products receive financial support to develop and research value-added products such as products processed from cashew nuts: cashew jam, roasted cashew nuts, flavored cashew nuts...
Second, promote the export of organic agricultural products with high added value. The National Program on Organic Production (NPOP) is implemented to support the production of agricultural products with great export potential by the livestock and aquaculture sectors. Along with that, many activities are carried out to promote the export of organic agricultural products such as: building brands for organic agricultural products; Develop uniform quality and packaging standards for organic agricultural products.
Third, marketing and promoting "Brand India". Establish funds dedicated to marketing agricultural products, especially organic agricultural products, geographical indications... to carry out communication campaigns for each type of product to build the brand of Indian agricultural products in target markets, such as the "Indian Banana" campaign, "Great Grapefruit" campaign. Geographical indication advertising campaigns for unique Indian agricultural products under the “Made India” brand have contributed to increased exports.
Fourth, attract private investment in developing infrastructure to serve agricultural exports, including: housing clusters, agricultural product handling infrastructure, cold storage, control infrastructure, logistics infrastructure, transportation service... This helps increase product shelf life and ensure the quality of agricultural products when transported long distances. A good logistics system increases the ability to handle the volume of agricultural goods, expands export markets, ensures good prices for products, and increases the competitiveness of Indian agricultural products in the international market.
Fifth, digitize agricultural export activities. The digitalization process is implemented in most stages of the agricultural production and supply chain, such as: land digitization; building market and product information portals; conduct single-window customs clearance for perishable imported and exported goods at key ports; Resolve complaints related to import and export.
Digitization of farmers' land records includes: satellite mapping of land; carry out activity registration for farm production organizations and farmers, link this mapping system with farmers' AADHAR cards, create a database for traceability and market linkage. Digitizing land and facilitating consolidation and consolidation of export-oriented arable land funds is an important element of India's agricultural export policy.
The Department of Commerce (DoC) builds a Trade Analysis Information Portal to provide information on consumer trends in markets. The Department of Agricultural and Processed Food Export Development and the Indian Seafood Export Development Department also established the Agricultural Product Exchange Information Portal and the Seafood Exchange Information Portal to provide market information to relevant parties. In addition, the India Trade Portal operated by the Federation of Export Organizations with support from the DoC provides information related to tariff scenarios in FTA and non-FTA situations, SPS notifications and market forecasts.
India develops a Manual of Importing Country Requirements (MICOR) for all major Indian agricultural exports, enabling companies to look up the requirements of importing countries to comply, thereby minimizing the risk of rejection of export shipments. The Indian government advocates creating an online portal that integrates all information related to the market, prices, risk insurance, SPS notifications and grievance redressal mechanism. From there, creating an important database for the decision-making process of exporters.
Sixth, build a national quality standards system. Setting standards and enforcing those standards is the basis for goods, especially agricultural products, to be exported more easily. This is a measure to resolve SPS and TBT barriers of countries, contributing to faster market access for Indian agricultural products. The Indian government is also very interested in research and development of new varieties for stronger quality management.
Seventh, establish and maintain unique supply chains and standards for both domestic and international markets. Ensuring stability in quantity and quality is very important to obtain sustainable export orders. Harmonizing standards in domestic and export markets will help improve product quality, raise awareness of good agricultural practices and reduce transaction costs for exports.
Eighth, response mechanism to SPS and TBT. While tariff barriers are gradually reduced due to the implementation of free trade agreements, non-tariff barriers and strict standards on quality and animal and plant quarantine are becoming barriers limiting Indian agricultural products from accessing international markets. Therefore, the Indian Government has a mechanism to respond to these barriers from responding to quick warnings; Establishing a portal that provides a basis for recognizing laboratories with the capacity to perform tests on exported agricultural products, helping to create an online platform to maintain traceability, supporting exports by standardizing testing protocols; Create a residue monitoring plan (RMP) in products. From there, Indian agricultural products can overcome SPS and TBT barriers more smoothly and access international markets more easily.
Some experience
From the success of Thailand and India in exporting agricultural products to alliances or an economic community under negotiated and approved tariff and non-tariff constraints, some experiences can be drawn:
Firstly, correctly determine the important position of the agricultural sector in the economy. From there, focus on developing agricultural production to transform agricultural economic structure, implement agricultural development strategies, promote production to ensure national food security and aim for export.
Second, build an export-oriented agricultural development strategy based on competitive advantages. Since then, we have focused on investing in research and application of science and technology for the production and processing of agricultural products for export.
Third, develop policies to attract foreign direct investment in agriculture and rural areas, to develop production and modernize rural infrastructure.
Fourth, promote trade promotion of agricultural products, innovate the marketing system from production, processing to export; Appreciate credibility to create new markets. At the same time, focus on training human resources, especially scientific and technical staff, because this is one of the decisive factors in the success of producing and exporting agricultural products. Synchronously coordinate policy systems such as price policy, tax policy, export policy... and solutions to develop production, especially for exported agricultural products, all countries have protection policies and special support programs, to create an export industry...
Fifth, develop and implement a set of agricultural product quality standards, meet regulations on food safety and hygiene, and overcome non-tariff barriers such as SPS and TBT more conveniently. Special attention is paid to the breeding stage, in order to create a sustainable comparative advantage.
Currently, the use of plant varieties in Vietnam is still arbitrary, with unknown origin, so crop productivity and quality are low, and the uniformity of product specifications is not high. The Government needs to support research and selection of new plant varieties suitable for the climate and soil of each region. Prioritize the application of biotechnology to create many plant varieties and production processes with high productivity, quality and efficiency, and limit the use of pesticides and chemicals in the farming process.
Sixth, invest appropriately in post-harvest processing and preservation technology, as well as packaging and transportation. Innovating modern equipment and technology for processing and preserving post-harvest agricultural products is the decisive factor to create breakthroughs in product quality.
Seventh, the Government needs to strengthen its role in export promotion activities such as supporting information on agricultural export markets for farmers and businesses. Support businesses in advertising and trade promotion activities, such as organizing market survey groups and fairs. Providing agricultural support services, helping farmers easily access important inputs such as seeds, irrigation, electricity, and fertilizers with high quality and low prices. The government needs to strengthen monitoring of export product quality, ensuring the reputation of agricultural products.
Eighth, strengthen the capacity of industry associations. This is a unit that gathers and links agricultural businesses to increase competitiveness in the international market. At the same time, attracting the consensus and support of businesses and farmers in implementing policies to promote agricultural exports, the most important of which is implementing quality production processes that can meet SPS and TBT standards of the international market.
Ha Diem HSV