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Vietnam: Thousands of Japanese goods to enjoy zero percent tariff in 2018
More than two thousand tariff lines applied for commodities will enjoy rate cut of 50-67 percent this year while 604 and 1,567 tariff lines will see a tax reduction of 20-45 percent and 4-18 percent, respectively.
The tax rates are applied for commodities directly transported from Japan into Vietnam. The items must also meet origin regulations, as stated in the agreement, and exporters are to have certificates of origin, in a form stipulated by the Vietnam Ministry of Industry and Trade.
VJEPA was the first bilateral free trade agreement that Vietnam entered into after the country joined the World Trade Organization in January 2007. The agreement covers comprehensive contents, including trade in goods and services, investment and improvement of the business environment.
When VJEPA came into effect in October 2009, Vietnam committed to eliminate some 90.6 percent of tariff lines for Japan within 16 years, while Japan pledged to eliminate some 94 percent of tariff lines for Vietnam within 10 years.
Meanwhile, under the AJCEP, the number of tariff lines enjoying import tax reduction and exemption this year is 6,201, of which 3,426 lines will have tax rate of zero percent from April 1 this year. They are machinery, equipment, tools and spare parts, iron, steel, copper, metals and articles of iron, steel, base metals, fabrics, apparel and other articles.
Statistics of bilateral trade between Vietnam and Japan for the entire last year haven’t so far released.
Vietnam and Japan maintained balanced trade with two-way export-import turnover reaching US$27.11 billion in the nine-month period last year, including US$13.41 billion from Vietnam’s imports and US$13.7 billion from its exports.
Vietnam’s key imports from Japan include machinery, equipment, computers, electronics products, iron and steel. In particular, machinery and equipment saw the highest turnover of more than US$3 billion, up 2.47 percent year-on-year, followed by computers, electronics products at US$2.1 billion up 10.79 percent and iron and steel at US$1 billion, up 11.48 percent.
Among other imports from Japan were cloth materials petroleum and pharmaceutical products, paper and rubber.
Vietnam has so far also become an attractive market for Japanese retailers following the popularity of Japanese goods in the domestic market.
According to Kazuhiro Takahashi, Head of the Food, Agriculture, Forestry and Fishery Division under the Japan External Trade Organization (JETRO), Vietnam is one of the potential food markets for Japanese enterprises, especially for aquatic products.
Katsuya Uchida, a representative of Japan’s Kyokuyo Company, said that the Vietnamese market currently accounts for 30 per cent of the total seafood export turnover of his company. Of which, salmon and tuna are the most consumed products and receive positive feedback from consumers.
In order to promote exports and dominate the Vietnamese market, Japanese consumer goods and foodstuff enterprises also tend to change some criteria of their products to suit the tastes of Vietnamese consumers.