Vietnam-Japan trade expected to surge in 2017

10:22 | 24/01/2017 Trade

Trade between Vietnam and Japan is expected to reach a new height in 2017 as the two countries have agreed on numerous measures to boost trade exchange, which were agreed on at a recent seminar on promoting trade with Japan held by the Ministry of Industry and Trade (MoIT).

An assembly line at Canon Vietnam Co, Ltd - Photo: VNA

Vu Cuong, deputy head of East Asia division of the Asia Pacific Market Department under the MoIT, said a series of visits made by leaders of the two countries in early 2017 reflected the two sides’ resolve to boost ties.

Japanese Prime Minister Shinzo Abe visited Vietnam in mid-January and the Japanese Emperor is expected to travel to Vietnam in mid-February, while Vietnamese leaders also have plans to visit Japan in March.

Aside from the good diplomatic relationship, trade experts urged the business community to seize opportunities brought about by the Vietnam-Japan Economic Partnership Agreement (VJEPA).

Cuong underlined the tax reduction roadmap stipulated in the VJEPA, under which import tax will be cut to 2.8% in 2018 and at least 86% of agro-forestry-seafood products, in addition, 97% of Vietnamese industrial products will enjoy preferential tax rates on the Japanese market.

Meanwhile, average taxes on Japan’s goods imported into Vietnam will be reduced to seven percent in 2018.

Within 10 years, the two countries will complete the roadmap for tax reduction to form a bilateral free trade zone in which 94.53% of Vietnam’s export turnover and 87.6% of Japan’s will be exempted from import taxes.

However, according to Le An Hai, deputy head of the MoIT’s Asia Pacific Market Department, Vietnamese enterprises have only taken advantage of a mere 40% of opportunities offered by the VJEPA.

Hai advised enterprises to invest in quality of goods and boost promotion activities to fully utilise the Japanese market.

Nguyen Trung Dung, Vietnam’s commercial counsellor in Japan, said the structure of Vietnamese and Japanese goods are complementary and not in competition against each other.

Japan mainly imports seafood, garments, footwear, and processed food while Vietnam imports machineries, equipment, technology and materials for production from Japan.

According to data from the Ministry of Industry and Trade (MoIT), Vietnam’s export to Japan in the first 11 months of 2016 was US$13.3 billion, up 3.1% on a yearly basis, making Japan the second largest export market of Vietnam behind the United States.