Vietnamese exports to Chile will benefit from tax incentives as of January 1 next year in compliance with the Vietnam – Chile Free Trade Agreement (FTA), which is hoped to spur bilateral trade turnover.
The countries inked the agreement on November 11, 2011 , and its amended version on May 20 this year.
Two-way trade in the past five years has grown by an average 27 percent. According to the Vietnam General Department of Customs, the country exported 176.9 million USD worth of commodities to Chile in the first 10 months of this year. The figure included 9.99 million USD from rice, nearly 23.4 million USD from textile and garments and almost 61 million USD from footwear.
However, both countries’ managerial agencies said that their trade performance hasn’t matched potential.
Director of the American Market Department under the Ministry of Industry and Trade (MIT) Nguyen Duy Khien pointed to the fact that Chilean enterprises prefer to do business with partners from countries having FTA with Chile. Therefore, their trade with Vietnamese businesses hasn’t been promoted in the past.
Under this FTA, Chile will remove 99.62 percent of its tariff lines within 10 years. Right after the agreement takes effect, 83.54 percent of tariff lines on Vietnamese goods will be cut down to 0 percent.
In return, Vietnam also pledges to remove 87.8 percent of tariff lines on Chile ‘s goods within 15 years.
Chile is considered as a gateway to other Latin American markets. Thus, experts from both sides said that the FTA will open up a large number of investment and trade opportunities for their businesses./.