ASEAN KEY DESTINATIONS
No ASEAN goods surge with tariff cuts
The reduction of tariffs under the ASEAN Trade in Goods Agreement (ATIGA) next year won't lead to a surge in ASEAN goods to Viet Nam, an official of the Ministry of Finance said.
Beginning January 1, 2015, Viet Nam will further cut 1,720 tariff lines from 5 per cent to zero under the ATIGA. About 7 per cent of tariff lines, or 600 items, are considered too sensitive to be cut to zero next year.
Nguyen Thi Bich, head of the Ministry of Finance's International Cooperation Department, said the tax cut on commodities such as steel, automobiles, and auto components would apply in 2018.
Petrol and tobacco companies have been negotiating for a tariff reduction after 2018, reported Tuoi Tre (Youth) newspaper.
Meanwhile, Viet Nam had been negotiating for the retention of the 5 per cent tax on especially-sensitive agricultural goods such as salt, sugar, chicken and eggs, as well as pork, and tropical fruits such as oranges, Bich revealed.
She expressed the belief that ASEAN goods would not flood the domestic market in spite of the tariff reductions because the nation had been following a schedule for a step-by-step cutting of tariffs under the ASEAN free trade agreement since 1999.
For instance, from 2012 to 2014, Viet Nam cut 7,000 tariff lines to zero and 2,000 tariff lines to 5 per cent.
Before 2011, Viet Nam's trade deficit with ASEAN reached US$5 billion to $7 billion each year, but this had been declining since 2012 and now stood at $3 billion per year, Bich noted.
The item with the largest trade deficit was petrol because Viet Nam exported crude oil worth $1.6 billion per year to ASEAN while it imported petrol and oil products worth $4.6 billion per year from other ASEAN countries.
Meanwhile, numerous domestic goods could compete with similar products made in other ASEAN countries, including computer and electronic products, electronic components and plastic products.
In the past three years, Vietnamese exports to ASEAN increased sharply mainly because of foreign direct investment enterprises, most of whom reduced imports from ASEAN.
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