Thanks to CPTPP, Vietnamese people will be able to buy foreign milk and lobster at cheap prices.
Lobsters imported from Canada to Vietnam from January 14 will have their import tax reduced from 35% to 15%, and all import taxes on seafood products, such as frozen crabs and sea fish imported from Canada and Australia, will be eliminated. Vietnamese people will be able to buy not only cheap lobsters, but also many other goods when entering CPTPP.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) officially took effect on January 14, 2019. According to the Multilateral Trade Policy Department (Ministry of Industry and Trade), Vietnam committed to a common tariff for all CPTPP countries.
Accordingly, Vietnam will eliminate import taxes on 66% of tax lines immediately after the Agreement takes effect and 86.5% of tax lines after 3 years from the date the Agreement takes effect. The remaining items will have a tax reduction roadmap mainly from 5 to 10 years.
For some particularly sensitive items, Vietnam has a roadmap of more than 10 years, such as beer, wine, chicken, steel, and cars under 3,000cc. Vietnam applies tariff quotas (TRQs) to sugar, eggs, salt (within the WTO quota) and used cars.
Besides the advantages for businesses when Vietnam joins CPTPP, perhaps consumers will also benefit from this Agreement.
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| Lobsters imported from Canada to Vietnam from January 14 will have import tax reduced from 35% to 15%... |
For example, lobsters imported from Canada to Vietnam from January 14 will have their import tax reduced from 35% to 15%, and all import taxes on seafood products such as frozen crabs and sea fish imported from Canada and Australia will be eliminated. This shows that Vietnamese people will have more or less the opportunity to buy goods at cheaper prices than before.
Vietnamese people will also be able to buy milk and dairy products at cheaper prices. According to data from the General Department of Customs, Vietnam imports milk and dairy products from 17 countries and territories, mainly from New Zealand. Next are Singapore, Japan and the US.
Observing that among the 10 countries participating in CPTPP, there are 4 countries exporting milk to the Vietnamese market with the largest market share.
As for milk imported from New Zealand, before the CPTPP comes into effect, the import tax rate on milk from this market has been reduced to 0% since 2018, based on the agreement of the ASEAN - Australia - New Zealand Free Trade Agreement (AANZFTA).
Thus, one of the benefits that CPTPP brings, it can be seen that the biggest advantage of CPTPP for Vietnam in particular and the remaining countries in general is that the tax rate of goods will gradually move towards 0%, including milk and dairy products.
If the roadmap is followed, within the next 7 years, imported milk from New Zealand, Singapore, Japan, etc. will be cheaper.
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| Grape wine and Champagne imported from Canada into Vietnam will decrease to 41%, |
From January 14, 2019, the import tax on grape wine or Champagne originating from Canada into Vietnam will be reduced from the current 56% to 41%, and will be reduced to 36% in early 2020.
Commitments of countries on some commodity groups with Vietnam
Shoes
78% of Vietnam's footwear exports to Canada will enjoy a 0% tax rate as soon as the Agreement comes into effect or a 75% reduction compared to the current tax rate. Leather footwear, for the first time, is committed by Japan in the free trade agreement to be gradually reduced and import tax eliminated in the 16th year from the date the Agreement comes into effect. Footwear import tax to Mexico and Peru will also be gradually reduced and eliminated in the 16th year from the date the Agreement comes into effect.
Seafood
Seafood products will enjoy a 0% tax rate as soon as the Agreement comes into effect when exported to Canada and Japan. Many seafood products that have not yet been committed to eliminating tariffs in the Vietnam - Japan and ASEAN - Japan agreements will enjoy a 0% tax rate when exported to Japan, including some species of cod, surimi, shrimp, crab ... will enjoy a 0% tax rate as soon as the Agreement comes into effect. Tra and basa fish are the only seafood products that are exported to Mexico in large quantities and will enjoy a 0% tax rate in the third year from the date the Agreement comes into effect.
Rice
With a 0% tax rate as soon as the Agreement comes into effect, rice will be able to access and grow in the Canadian market. Mexico is also a new market, exporting about 70,000 tons/year and will enjoy a 0% tax in the 11th year from the Agreement coming into effect. Rice exports to Japan are still subject to tariff quotas according to Japan's commitments to the WTO. However, the Ministry of Agriculture and Rural Development of Vietnam and the Ministry of Agriculture of Japan have signed a Cooperation Agreement on Rice Value Chain Development to improve the possibility of Vietnamese rice winning bids for Japan's WTO tariff quota.
Coffee, tea, pepper, cashew nuts
These items will enjoy a 0% tax rate as soon as the Agreement comes into effect. Mexico will eliminate taxes on Robusta coffee beans in the 16th year from the date the Agreement comes into effect, and on Arabica coffee beans and processed coffee, the tax rate will be reduced by 50% compared to the current tax rate in the 5th and 10th years from the date the Agreement comes into effect.
Wood furniture
Exports of interior and exterior wooden furniture to Canada and Peru will enjoy a 0% tax rate as soon as the Agreement comes into effect.
