Experts of the Japan External Trade Organization (JETRO) at the seminar “Vietnam-Japan Free Trade Agreement (FTA) and Economic Partnership Agreement (EPA)” disclosed that only 39 percent of Japanese entrepreneurs doing business in Asia and Oceania applied the Vietnam-Japan FTA and EPA, compared to 58.2 percent in Indonesia, 53.7 percent in Thailand and 48.9 percent in Malaysia. It is an undesirable barrier to comprehensive economic cooperation between Vietnam and Japan, as well as to other important international partners.
According to the statistics of the Ministry of Industry and Trade (MoIT), in 2013-2014, 84.4 percent of preferential Certificate of Origin (C/O) for export to South Korea were applied in 2013 and 85 percent in 2014. While the figures to ASEAN members were only 29 percent in 2013 and 25 percent in 2014; to China 35.9 percent and 33 percent, respectively; and Japan, 35.8 percent and 33.7 percent.
Mr Nguyen Quang Phuc, Import-Export Department, MoIT, disclosed that C/O plays a very important role in FTA and EPA as it decides preferential treatment in import tariffs. Besides C/O ensures “trade facilities” and prevents “trade fraud”. Those regulations are instrumental in showing recipient and privilege rates of FTA members. Therefore, experts believed that if foreign businesses satisfy all C/O regulations, they will benefit more from preferential tariffs.
For her part, Ms Atsuko Fukagawa, Deputy Managing Director, JETRO Ho Chi Minh City, said that the main problem is the lack of knowledge, initiative and linkages of Japanese businesses in Vietnam. Many Japanese businesses are not aware of privileges and how to get them. The lack of information, even in potential sectors such as garment, IT and agriculture, means that Japanese businesses remain unaware of preferential treatments.
Ms Fukagawa Atsuko believed the main reason is some 60 percent of Japanese businesses in Vietnam focus on export to Japan and only 20 percent to ASEAN. As a matter of fact, more Japanese businesses in foreign countries export back to Japan than local exporters. Therefore, the application of FTA/EPA in export activities is even more important. Furthermore, Vietnam will gain the most from TPP with the condition that C/O is available. In preparation for the enforcement of TPP combined with the application of FTA/EPA, the seminar focuses on C/O and formalities so that businesses can make the best use of FTA/EPA in the future.
In addition, experts believe that the maximum use of FTA/EPA plays an important role in promoting exports of businesses as well as cooperation among member countries. For instance, TPP will not only expand Vietnamese garment export, but also apply the Yarn Forward rule (yarn, cloth, dyeing, tailoring must be from member countries) to get preferential tariffs. TPP will also start a foreign investment flow into Vietnam in such areas as yarn, cloth and dyeing.
Anh Phuong
Vietnamese
