Exporters lack tariff knowhow

Tuesday, Jul 14, 2015 08:18

Viet Nam is part of 15 FTAs, including 10 signed FTAs and five which are undergoing negotiation (RCEP; VN-EU; VN-EFTA; TPP and ASEAN-Hong Kong). — Photo tctonline
HCM CITY  (VNS) — Vietnamese exporters are not making use of Foreign Trade Agreement (FTA) opportunities as many of them do not know how to claim priority tariffs from FTAs.

Bui Kim Thuy, deputy head of the Ministry of Industry and Trade's Foreign Trade Agency, said that Trade in Goods Agreements, which reduce or eliminate tariffs to zero per cent on schedule, was the most important component of an FTA. Thuy spoke last week at a forum held by Viet Nam Plastics Association in collaboration with Enterprising Fairs India Pvt Ltd.

The importance of the rule of origin (ROO) is to identify whether import goods can be eligible for tariff concessions, to keep a rational balance between "trade facilitation" and "fraudulence prevention", and to rate the use of FTA benefits from each of the FTA parties, she said.

"To get the ideal tariff rate from FTA, export products have to satisfy ROO prescribed in a specific FTA," Thuy said.

To meet the preferential ROO, exporters will be issued a preferential C/O and then will enjoy preferential tariff treatment. This would help stimulate production and exports-imports from FTA countries.

Thuy said that for non-WTO members, the tariff rates on plastics was 150 per cent, compared to WTO members' tariff of an average of 13.5 per cent.

However, for FTA members, the tariff rate on plastics was an average of 0-5 per cent.

Viet Nam is part of 15 FTAs, including 10 signed FTAs and five which are undergoing negotiation (RCEP; VN-EU; VN-EFTA; TPP and ASEAN-Hong Kong).

Ho Duc Lam, chairman of the Viet Nam Plastics Association, said that since the 1970s the Vietnamese plastics industry had grown steadily at two digits, with an average annual growth rate of over 12 per cent.

The plastic sector's revenue reached $9.053 billion, an increase of 8.3 per cent over 2013 and 7.6 per cent in 2012.

For the first six months, the sector had revenue of $4.2 billion, an increase of 10.3 per cent compared to the same period last year.

Raw materials

Raw material imports last year were 3.45 million tonnes worth a total of $6.32 billion, an increase of 9.4 per cent in volume and 10.6 per year in value against 2013.

Polyethylene and polypropylene were imported mostly from Saudi Arabia, Korea, Taiwan, Thailand, Singapore, Japan and Malaysia, accounting for 55 per cent of total import volume.

In the last 10 years, plastic packaging has been one of the key export items of the plastics sector, with an annual growth rate of 7.8 per cent per year. B. Swami-nathan, managing director of Enterprising Fairs India Pvt. Ltd, said Viet Nam's plastics market was one of the fastest-growing markets in Southeast Asia.

At 4.2 million tonnes per annum, it is the second largest market after Thailand in Southeast Asia.

At the forum, Viet Nam Plastics Association called on domestic enterprises to participate in the first edition of three-in-one exhibition: Plastics Viet Nam, RUBEXPO Viet Nam and COMPACK Viet Nam, which will be held on July 23-25 at Sai Gon Exhibition Centre.

The exhibition, co-organised by VPA and Viet Nam Rubber Association, will include more than 100 booths from India, China, Taiwan, Singapore, Korea, Iran, Malaysia and Italy, showcasing the latest products and technologies in plastics processing. —VNS

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