Manufacturing plastic components at Seiyo Vietnam Co, Ltd in Que Vo Industrial Park, Bac Ninh province. (Photo: VNA) Hanoi (VNS/VNA) - Flexible rules of origin in the European Union-Vietnam FreeTrade Agreement (EVFTA) will help local plastic enterprises take full advantageof preferential tariffs when exporting to the EU market.
NgoChung Khanh, Deputy Director of the Multilateral Trade Policy Department underthe Ministry of Industry and Trade, says this trade deal allows local plasticproducing firms to use up to 50 percent of non-originating materials inproduction.
Thisadvantage would create favourable conditions for Vietnamese plastic products toenjoy preferential tariffs in the EU market, he said.
Atpresent, domestic raw materials have met only between 15 percent and 35 percentof local demand. Vietnam has more than 2,000 plastic enterprises, of which 84 percentare based in HCM City.
Vietnameseplastic products in the EU market do not face an anti-dumping tariff of between8 percent and 30 percent like plastic products from some other countries.
Accordingto the Import-Export Department under the Ministry of Industry and Trade, thestable export growth of the domestic plastic industry in recent years has shownthe high import demand of plastic products in the EU and Japan markets,especially plastic pipes and bags. Those are traditional markets in which localbusinesses are keen to increase market shares.
Ofwhich, the local plastic packaging businesses have increased their exports tothe EU, largely due to the dual benefits of prices and import tax incentives.
Inaddition, the domestic plastic industry has paid attention to increasingexports of high-tech plastic raw materials to gain a higher export valuecompared to normal plastic products, reported the Dautu (Vietnam Investment Review) newspaper.
AnPhat Holdings Group is one of the largest domestic plastic producers that hasinvested heavily in expanding production in recent years. It has set a goal ofexporting biodegradable plastic packaging products to demanding markets likeEurope, Japan, and the US.
Accordingto the Vietnam Plastics Association, in the first half of the year, Vietnam’s plasticexport value reached 1.62 billion USD, a decline of over 5 percent compared tothe same period last year.
Thenation’s recent signing of new free trade agreements, including the EVFTAeffective on August 1, are expected to offer many opportunities for localenterprises to boost their exports of plastic packaging products.
Itis anticipated that foreign partners will gradually shift orders from China to Vietnamin an effort to capitalise on cheap production costs and to enjoy export taxincentives to Europe.
Lastyear, the country’s plastic export value reached a total of 3.44 billion USD,an increase of 12.9 percent compared to 2018. The General Department of Customsreported that the plastic export value has had an average annual growth rate ofabout 15 percent in recent years.
Especially,strong growth was recorded in a number of markets, including Hong Kong (up 63.3percent), Switzerland (up 131.3 percent), India (up 47.6 percent), the US (up39.3 percent) and the EU (up 10 percent)./.
VNA
