Origin of goods is not a measure of the actual value of products but only quality contribute to the lasting vitality touching the inner needs of consumers’ hearts.
The quality assurance standards of products together with brand should be enhanced to jointly elevate the position of the “Made in Vietnam” product in domestic commerce and open the door to global market.
MITIGATING THE CONSUMERS’ SUSPICION
The Ministry of Industry and Trade has just issued a draft regulating the Vietnamese origin written on label of goods, also known as Made in Vietnam (labelling in internal market is required to be in Vietnamese), which exhaustedly administers standards and conditions for goods to be labelled “Made in Vietnam”.
Seen from international law, Vietnam has become a party to several free trade agreements with many countries or groups of countries around the world. Each FTA governs different approaches to label the origin of product for every single member states. For example, ASEAN Trade in Goods Agreement (ATIGA) regulates regional value content (RVC) must reach at least 40%(1) to attest the origin of ASEAN’s goods or allows partial accumulation to reach at least 20%(2), besides possessing Change in Tariff Classification (CTC)(3). Europe-Vietnam Free Trade Agreement (EVFTA) administers goods shall be considered as originating in a member country though they are not wholly obtained provided that it have undergone sufficient working or processing procedures in that country(4) (along with the regulations on working, processing method applied for each specific goods(5)).
In a word, FTAs’ regulations on originating products are playing a vital role to have Vietnamese companies oriented towards exportation to international marketplace. With a view to mitigating suspicion of consumers about Vietnamese products, legislators shall promptly impose a regulation on labelling origin of products circulating inland. Seizing this window of opportunity, Vietnamese companies are supposed to grasp the laws and regulations on labelling domestic products and gratify standards of origin when it comes to exportation. Nevertheless, these enterprises should envisage much-needed demands of retail customers when they display the sense of value in the label namely “Made in Vietnam”.
“AMENDMENT” BY IMPOSING LAWS: NECESSARY, BUT NOT SUFFICIENT
It is affirmed that branding relies on not only stringent legal instruments but also brand maker’s understanding of their value contributing to such brand. Concerning the average consumers, they are unable to care enough about what percentage of domestic value-added content, but those customers only evaluate a product “Made in Vietnam” based on manufactured materials, quantity of steps in processing procedure executed in Vietnam or by Vietnamese companies. It should not be a failure for businessman to perceive that origin of goods is not a measure of the actual value of products and only quality contribute to the lasting vitality touching the inner needs of consumers’ hearts.
It goes without saying that any products, even the simplest one, is a harmonization of value chain which is inclusive of tangible values (materials, labor) and intangible ones (ideal, business model) connected through a set of stages. In the global production chain, each company from any country can manufacture a product served as an essential supply chain, contributes to the overall value of the nationwide production line.
To be aware of the abovementioned context, in addition to comply with the law to ensure Vietnamese brand has a legitimate position in the marketplace, Vietnamese enterprises should enhance their strengths to finally bring out products “Made in Vietnam” which are commensurate with gratified quality and core value.
In case newcomers wish to acquire market share of successful products retained by other companies, they are required to solve capability problem. Instead of that, by the long-distance vision in the gigantic production chain of the global economy, Vietnamese companies should primarily focus on manufacturing a product, being simultaneously an explicit declaration of quality, which is inherent in “Made in Vietnam” brand.
Seen from the perspective of state authority, it is essential for legislators to issue stringent legal instruments governing the process of evaluate products “Made in Vietnam” to strengthen competitiveness, protect Vietnamese brand and harmonically comply with FTAs to which Vietnam has been a party. Besides, the quality assurance standards of products together with brand should be enhanced to jointlyelevate the position of the “Made in Vietnam” product in domestic commerce and open the door to global market. In spite of everything, those efforts should be combined with strictly and effectively executive process to bring back consumers’ belief which is extremely fragile among them at the present time. It stands to reason that Vietnamese brands will be taken up the cudgels to confidently get involved in the increasingly competitive global environment.
(*) Managing Director of Victory LLC
(1) Article 28.1 of ASEAN Trade in Goods Agreement
(2) Article 30.2 of ASEAN Trade in Goods Agreement
(3) Article 28.1 of ASEAN Trade in Goods Agreement
(4) Article 2 and 5 of Decree 01 of EVFTA regulating goods’ origin and the method of administrative management cooperation
(5) Schedule 2 of Decree 01 of EVFTA regulating goods’ origin and the method of administrative management cooperation