Why will goods with 30% domestic content be labeled 'made in Vietnam'?
The Deputy Minister of Industry and Trade said that the 30% rate is to avoid the "awkward" situation where a product is recognized by the world as "made in Vietnam" but Vietnam is not.
According to the draft Circular that the Ministry of Industry and Trade is seeking comments on, a product is only identified as "made in Vietnam" when it simultaneously satisfies the following conditions: The final stage is not simple processing and the minimum domestic value-added content is 30%. Sharing with the press on August 14, Deputy Minister of Industry and Trade Tran Quoc Khanh explained in more detail why the domestic value-added content ratio is not higher than 30%, or even up to 50% or 60% like some countries.
Mr. Khanh said that if additional conditions were added, it would lead to an "awkward" situation where the whole world recognizes a product, but Vietnam alone does not recognize a product as its own. In reality, many Vietnamese products only need to meet a 30% domestic content increase to be recognized as Vietnamese origin when exported to the world.
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Goods are labeled "made in Vietnam" when they have a minimum domestic value added ratio of 30% and the final production stage does not involve simple processing.Photo: TL |
He also cited that the ASEAN Trade in Goods Agreement (ATIGA) and other free trade agreements (FTAs) have value-added content called "regional value content" (RVC) and allow the accumulation of origins of member countries. For example, with a regional value content of 40% in ASEAN, a product with 20% value from Thailand, 10% from the Philippines, 5% from Laos and 5% from Vietnam will be considered to meet the ASEAN origin criteria and will be granted a Certificate of Origin Form D.
The stages considered simple processing include:
- Preserve goods during transportation and storage.
- Ldust, sift, select, sort, clean, paint, cut into sections;change packaging and dismantle or assemble shipments; bottling, jarring, packing, bagging, boxes.
-Stick labels, marks, and distinguishing marks on products or product packaging.
- Simple mixing of products, whether of the same or different types.
- Simple assembly of product parts to create a complete product.
- Killing and butchering animals.
The draft Circular on "made in Vietnam" has stricter regulations, meaning that the 30% value added ratio is only calculated for Vietnam's value. "Thus, many products may meet ASEAN origin requirements and be granted a Certificate of Origin Form D, but they may not necessarily meet the conditions to be considered Vietnamese goods," Mr. Khanh said.
If the product does not meet the requirements, what country of origin should be stated?
The draft Circular sets out criteria for determining whether a product is Vietnamese or made in Vietnam. The question arises, with a product that does not meet the conditions to be shown as Vietnamese, which country of origin will be stated if the enterprise imports inputs from many different countries?
Explaining this, Deputy Minister Tran Quoc Khanh said that if a business imports inputs from many different countries, the final product does not meet the conditions to be shown as Vietnamese goods, it will show the origin according to the provisions of Decree 43/2017. "That means the business determines and takes responsibility for itself, as long as it does not state the origin of Vietnam," he said.
In addition, in case of violations, according to the provisions of the draft, the General Department of Market Management is the presiding unit, coordinating with relevant units of the Ministry of Industry and Trade and other competent agencies to inspect and handle violations during the implementation process. In case of detecting violations, the management agency will, depending on the level of violation, issue appropriate sanctions in accordance with the provisions of law.
According to him, the regulation that temporarily imported goods for re-export, transit or transit through Vietnam is not allowed to be presented as Vietnamese goods is a regulation to prevent trade fraud, including origin fraud, which negatively affects Vietnamese goods. "With this regulation, the authorities will have more basis to fight against trade fraud," said the leader of the Ministry of Industry and Trade.
The first draft of the Circular was released by the Ministry of Industry and Trade after more than a year of "gestation", in which it is stipulated that goods must have a domestic value-added content of 30% and the final production stage must not be simple processing operations to be considered "products of Vietnam".
