Deep integration, big opportunities

(VEN) – Vietnam is quickly and deeply integrating into the regional and global economy providing many opportunities for Vietnamese businesses to boost exports.

deep-integration-big-opportunities-1346733-31-12-2013-14

As a result of regional economic integration, Vietnamese exports to the Association of Southeast Asian Nations (ASEAN) countries and ASEAN’s partner countries including China, the Republic of Korea, Japan, Australia, New Zealand and India grew by an average of more than 20 percent per year, which was higher than the overall export growth of 15 percent. About a third of all exports to markets, which have concluded Free Trade Agreements (FTAs) with Vietnam, were the result of tariff preferences and others.

Following the itinerary of the FTAs between Vietnam and ASEAN and ASEAN’s partners, six ASEAN countries, China and the Republic of Korea have slashed their import tariffs to zero percent since 2010, while Vietnam will have to do so by 2015. Japan has cut their import tariffs to zero percent on items on the reduction lists for 2008 and 2013, while Vietnam will do this with Japan within 15 years until 2023. India has lowered their import tariffs to zero percent on the reduction lists for 2013 and 2016, while Vietnam will do the same thing by the end of 2018 and 2021. Australia and New Zealand will lower their import tariffs to zero percent on the reduction list for 2015, while Vietnam will do it by 2018 and 2020.

The Ministry of Industry and Trade said that most Vietnamese exports to China and the Republic of Korea were free from import tariffs excluding sensitive items. Twenty-three of the 30 Vietnamese high-value agricultural and forest products and seafood exports to Japan are subject to the zero percent now or for no longer than 10 years. Japan has also provided better preferences for Vietnamese goods than other ASEAN countries, including for bee honey, ginger, garlic, litchis, durians, shrimp and crabs. Within the next ten years 98 percent of the tariff lines on Vietnamese industrial product exports such as footwear, garments, electronic equipment, electric wire, sanitary ware and wood products to Japan will be terminated.

Ninety-seven percent of Vietnamese exports to Australia and 90 percent of Vietnamese exports to New Zealand have been subject to import tariff reduction and cut since 2013, and 100 percent of Vietnamese exports to these markets will not have to pay import tariffs by 2020. Similarly, 72 percent of Vietnamese exports to India will pay the zero percent preferential import tariff from 2016 (the most preferential items will include electronic ware, textiles, garments, chemicals and several kinds of machinery and equipment).

In the near future Vietnam will conclude the Trans Pacific Partnership (TPP) Agreement between 12 countries including Australia, Brunei, Canada, Chile, Japan, New Zealand, Mexico, Malaysia, Peru, Singapore, the US and Vietnam. It will also sign a Free Trade Area (FTA) agreement with the European free trade bloc including Iceland, Liechtenstein, Norway and Switzerland. Then, the level of Vietnam’s integration with the regional and global trade liberalization market will increase providing more opportunities and benefits for the country, particularly when it effectively combines integration commitment implementation with boosting domestic reforms.

However, international integration and FTAs are insufficient. Sharply-reduced tariffs would provide great opportunities for Vietnamese businesses to boost their exports, particularly those to partner countries with a high level of trade liberalization or high preferences for Vietnamese goods. However, how they will make the most of the opportunities relies on macro policies on trade liberalization, the ability to meet requirements on the origin of products, regulations related to technical barriers, effective distribution networks and business competitiveness.

Experts said that Vietnamese businesses had not made the most of FTA opportunities, particularly tariff preferences./.

By Lan Ngoc

Sponsored links

NEWSLETTER

Sign-up for our email newsletter and get updates latest news from us