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Vietnamese and Japanese exports to have tariffs cut

Update: April, 17/2009 - 00:00

Vietnamese and Japanese exports to have tariffs cut

(18-04-2009)

HA NOI — A comprehensive free-trade agreement with Japan, which will take effect in July this year, was ratified by Prime Minister Nguyen Tan Dung on Thursday.

It is expected that with the new Viet Nam-Japan Economic Partnership Agreement (VJEPA), 92 per cent of goods flowing between the two countries will no longer be subject to tariffs within the next 10 years.

VJEPA is a comprehensive bilateral trade agreement, covering areas such as goods and services, investment, business environment improvement, labour movement, and technical standard co-operation.

Some commodities such as Viet Nam’s agricultural products, garments and marine products, as well as Japan’s industrial commodities, including electronics and car equipment, will enjoy tax reductions or exemptions under the agreement.

Initially, Japan will work with Viet Nam to help train Vietnamese nurses in Japan, develop support industries, establish a bilateral dialogue mechanism for the garment and textile sector, improve food hygiene and safety inspection capacity, and perfect quality standard system.

The VJEPA will encourage the economic co-operation, trade and investment exchanges between Viet Nam and Japan.

The agreement is providing more opportunities for Vietnamese agricultural, forestry and aquacultural companies to access the Japanese market, according to Le Trieu Dung, head of the ASEAN section of the Ministry of Industry and Trade’s Multilateral Policy Department.

For example, 23 out of the 30 types of Vietnamese agri-aqua-forestry commodities with the largest export values will be exempt from tax, he said.

Japan will offer Viet Nam a quota of 100 tonnes of honey a year and gradually increase to 150 tonnes, with a tariff of 12.8 per cent imposed on export volume within the quota.

Durian will immediately enjoy zero tax, while pepper and sweet corn will gradually see the elimination of taxes over the next five to seven years. Coffee and tea will become tax-free in 15 years’ time.

Shrimp exports will become tax-free immediately, and cuttlefish and octopus will enjoy this benefit after five years.

Dao Tran Nhan, deputy director of the ministry’s Asia-Pacific Department, said that in the future, Japan would have large demand for food processed from pork, fresh vegetable, flowers, mechanical appliances and plastic items.

However, there were some difficulties that Vietnamese enterprises wishing to access the Japanese market should pay attention to, Nhan said.

The first difficulty is that small and medium-sized Vietnamese enterprises often lack information about the Japanese market, and lack experience in trading with Japanese companies, he said.

Secondly, Japan has been tightening regulations for food hygiene safety for agricultural exports to the country; Japanese consumers also have strict requirements for product quality. Vietnamese firms should pay attention to Japanese’s purchasing habits, Nhan said.

Currently, the Asia-Pacific Department, Viet Nam’s Commercial Affairs office in Tokyo and the Commercial Affairs branch in Osaka act as an intermediary for enterprises to seek Japanese partners and access their market.

VJEPA, which was initiated during PM Dung’s visit to Japan in October 2006 was signed in Tokyo on December 25 last year. — VNS

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