Main competitors of Vietnam in Japan
- The largest importing sources of Japan
Japan is an island nation located along the western Pacific Ocean in Northeast Asia. This geographical feature facilitates trade between Japan and a variety of economies around the world, especially in the Asia-Pacific region (APAC). Among Japan's top 10 largest import partners, there are 7 APAC economies (including Vietnam), accounting for 48.6% of the country's total import turnover. In addition, Japan also imports a lot from the Middle East (United Arab Emirates (UAE) and Saudi Arabia).
Table 1: Top 10 importing sources of Japan in 2023
|
No. |
Importing partner |
Import value in 2022 (billion USD) |
Proportion in Japan’s total imports (%) |
|
1 |
China |
174,26 |
22,16% |
|
2 |
United States |
83,83 |
10,66% |
|
3 |
Australia |
64,88 |
8,25% |
|
4 |
UAE |
37,07 |
4,71% |
|
5 |
Taiwan (China) |
35,65 |
4,53% |
|
6 |
Arab Saudi |
34,77 |
4,42% |
|
7 |
Korea |
31,11 |
3,96% |
|
8 |
Vietnam |
25,87 |
3,29% |
|
9 |
Thailand |
25,75 |
3,28% |
|
10 |
24,35 |
3,10% |
Source: ITC Trademap, 2024
The above partners are currently dominating the Japanese market in most products (especially raw materials, machinery, equipment, components, pharmaceuticals, etc.). Among them, many are large economies with high competitiveness, and have many export products similar to Vietnam, so Vietnamese goods are assessed to face a high level of competition when entering the Japanese market.
- FTA partners
By the end of 2023, Japan had a total of 21 free trade agreements (FTAs) in effect (with 49 economies) and 03 FTAs under negotiation (with Türkiye, Colombia, China and South Korea) (according to the Ministry of Foreign Affairs of Japan, 2023). Thus, goods from these 49 partners when exported to the Japanese market can enjoy FTA tariff preferences with Japan.
Most of Japan's FTA partners are located in Europe and Asia, with many products similar to Vietnam. Therefore, although sharing 04 FTAs with Japan (AJCEP, VJEPA, CPTPP, RCEP), Vietnam still has to compete fiercely with many rivals, especially economies in the region such as China, ASEAN... when exporting to the Japanese market.
Table 2: Japan’s FTA and FTA Partners
|
No. |
FTA |
Partners |
|
1 |
21 FTAs in effect |
- 14 Asian partners: 10 ASEAN countries, Korea, China, India, Mongolia. - 29 European partners: 27 member states of the European Union (EU), the United Kingdom, Switzerland. - 04 American partners: Chile, Peru, Canada, the United States. - 02 Oceania partners: Australia and New Zealand. |
|
2 |
03 FTAs under negotiation - EPA Japan – Türkiye - EPA Japan – Colombia - EPA Japan – China – Korea |
Türkiye, Colombia, China, Korea |
Source: Ministry of Foreign Affairs of Japan, 2023
- GSP partners
The Generalized System of Preferences (GSP) is a preferential tariff mechanism that an importing country (usually a developed country) voluntarily grants to developing and least developed countries. As of April 2024, Japan is applying the GSP mechanism to 130 countries and territories on the list of developing and least developed countries, including Vietnam (Japan Customs, 2024).
Unlike FTAs, GSP is a unilateral preferential mechanism, so Japan can change the subjects and conditions for enjoying GSP at any time, depending on Japan's policies in each period. In addition, preferential tariffs under GSP are often not as competitive as preferential tariffs under FTAs. However, the tariff reduction under Japan's GSP mechanism also creates certain advantages for partner countries enjoying this mechanism.
Source: Center for WTO and International Trade
