Some 300 goods are expected to enjoy preferential tariffs under a pending decree detailing tariff cuts under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Local footwear firms have reportedly optimized export opportunities from the Canadian market thanks to their strict compliance to origin regulations.
Vietnam Economics News, a press office under the Ministry of Industry and Trade (MoIT), reported that the draft decree has been submitted by the Ministry of Finance to the Government for approval within the month.
Local firms are keen on updating changes to tariffs and customs procedures related to the implementation of the CPTPP so that they could plan out their business strategies.
During recent talks on tax policy and customs procedures for the implementation of the CPTPP, Vu Nhu Thang, head of the Department of International Cooperation under the Ministry of Finance (MoF), said that when drafting the decree, the MoF and the General Department of Vietnam Customs will put forth tax rates under the CPTPP in comparison with other free trade agreements (FTAs). The new generation pact will allow firms to select appropriate tariffs for the import and export of their goods.
Tariffs under the CPTPP are set to be pided into two categories. One for the countries which have put the trade deal into effect since late 2018, including Canada, Australia, New Zealand, and Singapore, and the other for those having implemented the CPTPP from 2019.
Hoang Thi Thuy, an official from the General Department of Vietnam Customs, noted that the decree will enable some 300 goods to enjoy higher preferential tariffs than before.
However, the certificate of origin (CO) is a must for goods subject to the preferential tariffs. Under the CPTPP, CO is valid within 12 months and could be granted to different batches of goods and various importers.
The tariff cuts by CPTPP member states open up an array of business and investment opportunities for local firms. Canada in particular has cut down tariffs on its agricultural imports, hence benefiting many of Vietnam’s key agro-fishery products, encompassing fresh, frozen and processed tra fish, shrimp, salmon, rice, coffee, as well as fruit and vegetables.
In particular, garment and textile exports are among the categories enjoying the most benefits from Canada’s tariff reduction. According to the MoIT’s Import-Export Department, local garment and footwear firms have optimized export opportunities from the Canadian market thanks to their strict compliance to CO regulations.
Elsewhere, the country’s key aquatic exports such as frozen and processed shrimps (HS codes: 030617 and 160521), have been immune from Japan’s taxation right after the implementation of the CPTPP. Other aquatic exports to the Japanese market also enjoy tariff exemptions, including thunnus albacares, sarda orientalis, swordfish, cod, and surimi.
According to the MoIT, tariff cuts are among the key incentives set by CPTPP member countries for Vietnamese goods. More importantly, local goods must satisfy the requirements of importers on quality, technical standards, and origin.
The CPTPP agreement groups 11 member countries, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The pact came into force from December 30, 2018, and Vietnam ratified the agreement on January 14, 2019.