09:23 | 15/07/2015 Trade
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.
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)
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 percent on schedule, was the most important component of an FTA.
Thuy spoke last week at a forum held by Vietnam 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 percent, compared to WTO members' tariff of an average of 13.5 percent.
However, for FTA members, the tariff rate on plastics was an average of 0-5 percent.
Vietnam 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 Vietnam 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 percent.
The plastic sector's revenue reached 9.053 billion USD, an increase of 8.3 percent over 2013 and 7.6 percent in 2012.
For the first six months, the sector had revenue of 4.2 billion USD, an increase of 10.3 percent compared to the same period last year.
Raw material imports last year were 3.45 million tonnes worth a total of 6.32 billion USD, an increase of 9.4 percent in volume and 10.6 per year in value against 2013.
Polyethylene and polypropylene were imported mostly from Saudi Arabia, the Republic of Korea, Taiwan (China), Thailand, Singapore, Japan and Malaysia, accounting for 55 percent 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 percent per year. B. Swaminathan, Managing Director of Enterprising Fairs India Pvt. Ltd, said Vietnam'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, Vietnam Plastics Association called on domestic enterprises to participate in the first edition of three-in-one exhibition: Plastics Vietnam, RUBEXPO Vietnam and COMPACK Vietnam, which will be held on July 23-25 at Saigon Exhibition Centre.
The exhibition, co-organised by VPA and Vietnam Rubber Association, will include more than 100 booths from India, China, Taiwan, Singapore, the Republic of Korea, Iran, Malaysia and Italy, showcasing the latest products and technologies in plastics processing./.