09:32 | 05/09/2018 Society
(VEN) - The number of preferential certificates of origin (C/O) has increased sharply this year, showing that Vietnamese companies have made good use of incentives provided by free trade agreements (FTAs) to increase exports.
Tran Thanh Hai, deputy director of the Agency of Foreign Trade under the Ministry of Industry and Trade, said that in order to benefit from FTAs to which Vietnam is a signatory, companies must prove the origin of goods. For example, a Vietnamese automobile company wishing to enjoy a zero-percent tax rate when exporting goods to ASEAN countries, must prove a localization rate of at least 40 percent.
According to statistics, in the first half of 2018, C/O issuance agencies granted 458,285 sets of C/O worth US$22.7 billion, an increase of 33 percent in number and 36 percent in value compared to a year ago. Export turnover of goods applying for preferential C/O in the first half reached US$20.4 billion, accounting for 38 percent of total export turnover to FTA signatory markets, showing that Vietnamese companies have made good use of incentives provided by trade agreements.
The EU-Vietnam Free Trade Agreement (EVFTA) expected to be signed in late 2018 will further promote this trend with more favorable conditions for exports thanks to tariff reduction commitments.
Hai said that the Ministry of Industry and Trade will continue to spread information on FTA incentives and how best to take advantage of them, and how to meet rules of origin to assist companies in making the most of these agreements. Vietnam has also expanded the exchange of e-C/O to aid trade activities. Vietnam joined the ASEAN Single Window (ASW) and exchanged the e-C/O Form D on January 1 this year. According to the General Department of Vietnam Customs, by the end of June, the country sent 15,536 e-C/O Form Ds to ASEAN countries, and also received 30,670 e-C/O Form Ds from those countries.
The Ministry of Industry and Trade will soon verify more than 100,000 e-C/O form Ds per year to implement and accelerate customs clearance at ASEAN markets. Exchanging e-C/O Form D has saved time and cost for import-export and preferential tax procedures.
Businesses have saved at least seven hours when preparing e-C/Os compared to preparing C/Os on paper. The electronic certificates also shorten customs clearance time, reducing storage costs for Vietnamese goods in the importing country.
Experts say Vietnam should develop support industries to increase the localization rate of its products and meet the rules of origin set by the markets to which Vietnam is a signatory.