The Ministry of Finance has announced that Vietnam has committed to adopting a common tariff for all countries in the TPP, with over 65 per cent of all import tariff lines being immediately eliminated after the agreement takes effect, with nearly 98 per cent to be eliminated after ten years. Remaining goods will have a ten-year roadmap or apply tariff rate quotas (TRQ).

TPP countries have also committed to removing tariffs on many Vietnamese goods. Between 78 and 95 per cent of import tariff lines will be eliminated immediately after the agreement takes effect and the remaining items will follow an elimination roadmap of five to ten years, except for certain sensitive goods that will apply a ten-year roadmap or TRQ. 

Many of Vietnam’s major export items will enjoy zero tax rates as soon as the agreement takes effect or after three to five years, such as agricultural products, fisheries, textiles, footwear, furniture, electronics, and rubber.

Items that Vietnam commits to removing import tariffs on as soon as the TPP comes into effect are animals, animal feed, certain dairy products, cereals, rice, leather and leather products, rubber and rubber products, pharmaceuticals, pesticides, chemicals, minerals, some types of paper, textile materials, leather shoes, cotton for textile products, fertilizers, perfume and cosmetics, machinery, furniture, wood and wooden products, instruments, iron and steel products, and electronic components.

Tariffs will be removed after four years on such items as confectionery, tea and coffee, corn, watches, household goods, sewing machines, generators, jewelry, construction materials, certain other dairy products, and plastic products, while tariffs on vegetable oil and vegetable products will be removed after six years.

After eight years tariffs will be eliminated on motorcycle and bicycle components, aquatic products, steel, bicycles, and certain special vehicles, with tariffs eliminated after ten to eleven years on meat, alcohol, sugar, eggs, salt, gasoline, certain auto components, and tires.

Vietnam has committed to removing export taxes on most items under a five to 15-year roadmap after the agreement takes effect but taxes will remain on a number of important commodity groups.

The TPP also provides some rules to simplify customs procedures in order to create favorable conditions for import and export business, such as regulations on express delivery, mechanisms on certificates of origin, risk management mechanisms for imported goods, and cargo clearance times.

It also provides a mechanism that allows enterprises to self-declare the origin of their goods instead of submitting certificates of origin issued by competent authorities in the exporting country to customs authorities.

Regarding financial services, commitments in insurance and securities will boost investment opportunities and contribute to promoting the development of Vietnam’s financial services market, such as expanding its commitment to open markets along with enhancing transparency, investment protection, and dispute resolution.

TPP members are now completing their review of procedures in preparation for the formal signing expected in early 2016.

As a member of the TPP Vietnam will have the opportunity to promote trade and investment and improve economic efficiency and competitiveness, contributing to economic growth. 

VN Economic Times