EVFTA provides boost in diversification of supply chains

Update: 11:00 | 27/10/2020
Along with tariff incentives brought about by the implementation of the EVFTA, local businesses have been advised to enhance their capacity to join new supply chains as a means of fully tapping into opportunities presented by the trade pact, according to insiders.
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EVFTA provides boost in diversification of supply chains
The implementation of the EVFTA’s commitments are expected to help local businesses develop and join new supply chains.

Julien Brun, managing partner of CEL Consulting, points out that the EVFTA offers a fresh impetus to accelerate economic growth, therefore boosting exports and attracting investment. In addition, it simultaneously supports localities and enterprises to invest in upgrading relevant infrastructure while developing production in their strongest fields.

Following the trade deal coming into force, EU importers are expected to encourage Vietnamese businesses to renovate their technologies and try to minimise the environmental impact on their products and supply chains.

Reductions in the use of plastics and chemicals to preserve fruit and vegetable products, coupled with encouragement to increase recycling, are anticipated to turn the country into a sustainable economy through the diversification of supply chains.

Nicolas Audier, chairman of the European Chamber of Commerce in Vietnam (EuroCham), said the implementation of the EVFTA’s commitments has required export enterprises to focus on supply chains and rules of origin requirements, therefore having a positive impact on the development of Vietnamese industries.

Moreover, ensuring the rules of origin requirements outlined within the trade deal helps the nation to attract foreign companies and boost investment into supply chains due to a large number of domestically-made materials and components being supplied to local assembly plants.

According to projections compiled by market research organisations, amid uncertainties surrounding the global economy this year, approximately 60% of the world’s leading manufacturers will rely on digital platforms in order to increase investment in the ecosystem.

As such roughly 20% of the world’s leading manufacturers will rely on an integrated intelligence system by 2021, with a focus on the use of the internet of things (IoT) and blockchain technologies.

Dr. Reza Akbari, Senior Lecturer and Program Manager of the Logistics & Supply Chain Management at RMIT Vietnam School of Business & Management underlined the need to apply breakthrough technologies as a means of changing the entire mechanism and transforming into a smarter supply chain ecosystem with greater connectivity to seize upon opportunities from the EVFTA.

These advanced technologies include artificial intelligence, self-driving cars, Big Data, blockchain, drones, robotics, and IoT applications.

Hoang Anh Tuan, director of Hitachi Vantara Vietnam Company, said the application of digital solutions at factories will help to assess the production situation, thereby devising proper plans aimed at improving the efficiency of production activities.

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(Source: VOV)