300 local product lines expected to enjoy sharp tariff cuts under CPTPP
The Ministry of Finance plans to issue tax frames on preferential import tariffs, which are expected to also apply to 300 Vietnamese products, as part of its implementing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the 2019-2020 period.
In a draft decree on the tax frames, 300 Vietnamese product lines are entitled to much steeper tariff cuts than products in other free trade agreements (FTA) between Vietnam and other countries.
The finance ministry and the General Department of Vietnam Customs have also released comparisons between tariff lines under FTAs and CPTPP, so local firms can choose the most appropriate preferential duties for them.
In order to enjoy the sharp tariff cuts under CPTPP, local firms must own preferential Certificates of Origin meeting the requirements of the 11-member trade pact. These certificates must be provided for multiple batches of goods to be used for no more than 12 months, as well as for different importers.
The preferential tariffs applied to Vietnamese product lines being shipped to countries that are CPTPP members are carried out in two phases.
At the end of 2018, four CPTPP member countries, including Canada, Australia, New Zealand, and Singapore, had abolished tariff lines for aquatic products, rice, coffee, fruits and vegetables imported from Vietnam. In addition, Vietnam has been entitled to tax reductions from Mexico, Chile, and Peru beginning in 2019.
Data released by the Import-Export Department at the Ministry of Industry and Trade indicates that a combined import turnover among the 10 CPTPP partners reached almost US$2.5 trillion, while Vietnam had exported products worth some US$42 billion to these countries, accounting for a mere 1.7% of the total figure. Accordingly, there is much room left for Vietnam to continue shipping more products to CPTPP partners.