Free trade deals give boost to Vietnam exports

Photo: AFP

Import tariff cuts under free trade agreements signed with several countries in the region have helped boost Vietnam’s exports this year.

Vietnam concluded a bilateral FTA with Japan last year and has multilateral FTAs with other countries like China, Korea, Japan, Australia, and New Zealand signed under the aegis of ASEAN of which it is a member.

Around 21 percent, 79 percent, 28 percent, and 13 percent of Vietnam’s exports to China, Korea, Japan, and ASEAN member nations enjoy tax cuts under FTAs.

Saigon 3 Garment Co’s exports to Japan have surged 20 percent to US$55 million, its chairman, Pham Xuan Hong, said.

Agreements between Southeast Asian countries and Korea that cut taxes on textile and apparel products from 13 percent and 8 percent have driven Vietnam’s export earnings in the year to date to $220 million, up 60 percent, Le Van Dao, general secretary of the Vietnam Textile and Apparel Association, said.

The deal with Korea, which has also seen seafood import taxes cut from 20-28 percent to 13-20 percent, has lifted exports.

Tax on Vietnamese fruit exports to China, which used to be 12-24 percent, has been abolished, helping exporters gain a foothold there, Huynh Quang Dau, deputy chairman of the Vietnam Fruit Association (Vinafruit), said without elaborating.

However, Vietnamese businesses have not made optimum use of the FTAs.

While some actively promote their products in these countries, many wait for contracts to “drop in their laps,” Hong of Saigon 3 Garment said.

It is foreign firms who are searching for potential Vietnamese partners, he added.

Technical barriers, mostly related to product origin declarations, packaging, and labeling standards, are still keeping Vietnamese fruits out of to China, Vinafruit said.

But Le Quang Lam, deputy head of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, said they are important issues to which Vietnamese exporters must pay attention when taxes come down.

However, the websites of the ministry, Ho Chi Minh City Trade Promotion Center, Vietnam Chamber of Commerce and Industry, and many business associations do not have updated or information about FTAs and are not user-friendly.

Only the National Committee for International Economic Cooperation’s website atwww.nciec.gov.vn/index.nciec??242 is reasonably useful.