The Vietnamese government said it has lowered to 0% this year 5,535 tariff lines for various products from the Eurasian Economic Union (EAEU), focusing on groups of items regarded as input materials for export production. These include textile materials, footwear and electronic components, plastic raw materials, fertilizers, corn, and wheat.
The reduction is part of Vietnam’s commitment under the Vietnam-EAEU Free Trade Agreement (FTA) signed between the two parties in 2016. The EAEU is comprised of Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.
Moreover, under the FTA, 3,720 tariff lines are also to be gradually reduced to 0% this year, including milk and dairy products, chemicals and chemical products, automobile and spare parts for automobiles, paper of all kinds, steel and steel products, rubber products, and household electrical appliances, according to a news report by Vietnam Customs News.
The report said that according to the International Cooperation Department of Vietnam’s Ministry of Finance, the tariff list under the Vietnam-EAEU FTA for the period 2018-2022 includes 10,865 tariff lines.
As the Vietnam-EAEU FTA rates are gradually cut down over the years, only those tariff lines in the unbound group have not changed their tariff rates compared to 2017. These are a total of 1,372 tariff lines, equivalent to 12.9% of the total schedule for 2018-2022.
Under the terms of the agreement, Vietnam will eventually eliminate import duties on 91% of goods originating from the EAEU. In turn the EAEU will abolish import duties on 88% of goods with immediate effect. The remaining tariffs will be gradually reduced within 10 years.
The FTA bears much significance for Vietnam, as it provides Vietnam-based manufacturers with access to a host of essential resources such as oil, gas, iron and steel. The agreement will also open Vietnam to a market of 175 million people, with an estimated GDP of US$2.5 trillion.
Likewise, member states of the EAEU look set to benefit from the FTA by using Vietnam as a gateway into the ASEAN market.
Photo: Schaeferhof
