Other members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have pledged to cut some 77%-100% of tariff lines on Vietnamese ordinary goods, news site Vietnamplus reported, citing a statement from the Ministry of Industry and Trade.
Specifically, Canada has committed to reducing 95% of its import tariff lines.
Meanwhile, Japan will eliminate 86% of tariff lines for Vietnam as soon as the trade pact becomes effective and nearly 90% after five years. This is the first time Japan has exempted most of Vietnam's agricultural and seafood imports from duties.
In addition, Vietnam is entitled to considerable tax reductions from many other CPTPP members, such as Peru (80.7%), Mexico (77.2%), Chile (95.1%), Australia (93%), New Zealand (94.6%), Singapore (100%), Malaysia (84.7%) and Brunei (92%).
Thus, thousands of tariff lines will be abolished for Vietnamese products, opening up many opportunities for domestic exporters, especially those in the footwear sector. Up to 78% of the revenue from Vietnamese footwear exports to Canada will be exempt from taxes.
For the first time, Japan has pledged to remove the import duty on Vietnam’s leather shoes. The tax will be eliminated in the 16th year after the CPTPP takes effect.
Also, Peru and Mexico will gradually cut their import tariffs on Vietnamese footwear products and will abolish the tax 16 years after the CPTPP becomes valid.
Further, seafood products exported to Japan and Canada will be exempt from taxes. Tra and basa fish will enjoy a tax exemption in Mexico in the third year after the pact comes into force.
The tax exemption policies of some CPTPP partners will also be applied to Vietnamese rice, coffee and wood products.
Meanwhile, Vietnam will immediately eliminate 66% of tariff lines, and by the third year, the country will slash up to 86.5% of these lines for its partners.
As for beer, alcohol, chicken, iron, steel and cars with an engine cylinder capacity below 3,000 cubic centimeters, the country will issue a roadmap exceeding 10 years for duty reductions.
According to the National Center for Socio-Economic Information and Forecast, under the Ministry of Planning and Investment, the CPTPP, which takes effect in Vietnam on January 14, will help expand the country’s gross domestic product (GDP) and export revenue by 1.32% and 4.04%, respectively, by 2035.
The agreement officially came into force on December 30, 2018, in six other countries after due process was completed. The 11-member trade deal was signed by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam in Santiago in March 2018.
The trade pact creates a free-trade market with a population of some 500 million people and a combined GDP of more than US$13.5 trillion that accounts for 13% of the global GDP.