DECREES TO IMPLEMENT FTAs AND ECONOMIC PARTNERSHIPS WITH PREFERENTIAL IMPORT TARIFF SCHEDULES

LEGAL UPDATE

1 January 2018 was an important date for Vietnam and ASEAN, as about 8 free trade agreements (FTAs) or economic partnerships came into force.

10 Decrees related to the FTAs between Vietnam and Korea (KVFTA), Vietnam and the Eurasian Economic Union (VN-EAEU FTA), Vietnam and Chile, the economic partnership between Vietnam and Japan (VJEPA), FTAs between ASEAN and China (ACFTA), ASEAN and Korea (AKFTA), ASEAN and Australia/New-Zealand, ASEAN and India (AIFTA), the comprehensive economic partnership between ASEAN and Japan (AJECP), and for the implementation of the ASEAN Trade in Goods Agreement (ATIGA) were issued.[1]

1. Reduction or elimination of tariffs

Since the entering into force of the ASEAN economic community in 2015 several tariffs have been reduced or cut to 0% already and in the period 2018-2022 this will continue. It depends on the FTA which products qualify for which reduction and when. The below list is not exhaustive but gives some examples of products for which the 0% rate or reduced regime will be applicable.

1.1. Machinery and equipment

Air conditioners, machinery, power equipment, electronic products and equipment, appliances, electronic products, components, refrigerators, and electric motors.

1.2. Raw material

Steel, steel products, construction stones, construction material, steel, aluminium, plastics, chemicals, rubber, plastic, iron and steel products, and paper.

1.3. Footwear and apparel

Leather and footwear, fabric, clothing, fibres, and raw material for textiles.

1.4. Food and beverage

Dairy products, coffee, tea, poultry, meat, fish, seafood, wheat flour, confectionery, processed meat products, cereals, animal products, sugar, agricultural products, and vegetable oil.

1.5. Various

Cars, auto (spare) parts, diesel, kerosene, paint, detergent, tobacco, alcohol, and pharmaceutical products.

2. Requirements to qualify

To qualify for reduced tariffs, the goods must meet the provisions on the origin of goods in the various agreements, as well as the requirement that the goods should be transported directly from the exporting country to Vietnam.

For export to ASEAN countries it is worth noting that companies can self-certify origins of goods.[2] As a result, domestic manufacturers might face fierce competition from imports into Vietnam under these FTAs and partnerships.

For more information, please contact:

Mark Oakley / Managing Partner

mark.oakley@acsvlegal.com

Hieu Pham / Special Counsel

hieu.pham@acsvlegal.com

© 2018 ACS Legal Vietnam Company Limited – All rights reserved

This legal update is not an advice and should not be treated as such.

Open in pdf: Update on Decrees to Implement FTAs and Economic Partnerships with Preferential Import Tarrif Schedules

[1] The text of the agreements and implementing documents can be found here: http://wtocenter.vn/fta

[2] See for more information our legal update on Circular 27.