15:27 | 12/12/2016 Trade
(VEN) - The agreement recently signed by the Vietnamese Ministry of Industry and Trade and the Cambodian Ministry of Commerce provides many tax incentives for Vietnam’s exports to Cambodia.
Cambodia has become a potential market for Vietnamese goods. Vietnamese petroleum, textiles, garments, steel, fruits, vegetables, wood and wooden furniture, and telephones have attracted consumers in Cambodia. In the first nine months of 2016, telephone and component exports to Cambodia increased 813 percent, wood and wood product exports to that market soared 428 percent compared to the same period last year. According to the General Department of Vietnam Customs, Vietnamese businesses exported goods totaling US$1.62 billion in value to Cambodia in the first nine months of this year.
The potential to export goods to Cambodia, especially northwestern Cambodia, is huge. Popular commodities in Cambodia include consumer goods, construction materials, furniture, refrigeration products, agricultural machinery, animal feed, seeds, and crop and plant protection products.
Northwestern Cambodia is a potential market for Vietnamese businesses, as it still has room for many commodities. Goods that can be found there are mainly soaps, cleansing substances, confectionery, and noodles of different kinds. The opportunity is there for Vietnamese businesses to diversify the range of commodities, increase sales and carve a major niche on this market.
Promoting exports to Cambodia
On the sidelines of the 7th Ayeyawady - Chao Phraya - Mekong Economic Cooperation Strategy Summit (7th ACMECS), the 8th Cooperation Summit of Cambodia, Laos, Myanmar and Vietnam (8th CLMV) and the World Economic Forum on the Mekong Region, Vietnamese Minister of Industry and Trade Tran Tuan Anh and Cambodian Minister of Commerce PAN Sorasak signed an agreement to boost bilateral trade, witnessed by the Vietnamese Prime Minister Nguyen Xuan Phuc, the Cambodian Prime Minister Hun Sen and numerous leaders of Vietnamese and Cambodian ministries and sectors.
Vietnamese steel has benefited from Cambodia’s tax incentives
The agreement provides tax incentives for goods from the two countries. Specifically, 29 Vietnamese items will be subject to a zero (0) percent import tax. They include milk and cream, cassava starch, meat products, rice products, confectionery, paints, plastics, paper, ceramics and pottery, steel and steel products. Vietnam is the only country to benefit from the Cambodian tax incentive, which is better than what Cambodia offers to other ASEAN (Association of Southeast Asian Nations) countries.
Meanwhile, Vietnam applies a zero (0) percent import tax to 39 Cambodian items, including farm produce, plastics, books, notebooks, textiles and bicycles, among others.
The agreement is expected to boost bilateral trade in general and Vietnamese exports to Cambodia in particular, and contribute to increasing the bilateral trade to US$5 billion in the coming time.