At the seminar (Photo: VNA) HCM City (VNS/VNA) – Vietnamese companies must know how to take advantage ofand mitigate the adverse impacts of the Comprehensive and Progressive Agreementfor Trans-Pacific Partnership (CPTPP), a seminar heard on February 27.
“Certificate of origin (C/O) is a must to receive tax incentives from CPTPPmembers and C/O for the CPTPP is complicated and totally different from what Vietnamhas done before,” Pham Binh An, Director of the HCM City InternationalIntegration Centre, told the seminar, which was titled “Guidelines to takeadvantage of C/O regulations in the CPTPP”.
To support Vietnamese enterprises, the Ministry of Trade has issued Circular03, which guides them and answers all their questions.
Trinh Thi Thu Hien, head of the certificate origin sub-department at theMinistry of Trade’s import – export department, said: “This is a great chancefor Vietnamese enterprises to expand their markets and attract more FDI andglobal supply chains if they can meet the stipulations under the C/Oregulation.”
The CPTPP allows all production chains, even very minor ones, to get taxincentives, encouraging CPTPP members to increase their investment in othermember countries.
Hien said Vietnam has signed bilateral free trade agreements with seven membersof the CPTPP.
“Local firms can apply for C/O either under FTAs or the CPTPP depending onproduction level and which one offers lower tax.
“The CPTPP is just beginning and tariffs are starting to fall while FTAs havebeen in effect for a long time and taxes have already been cut.”
She pointed out that a new provision in the CPTPP is that exporters canself-issue C/Os based on information stipulated in the CPTPP.
“If Vietnamese enterprises are ready to spend time to study and prepare forgranting C/O themselves, they can get a lot of benefits like saving the timerequired to go to authorities and the expenditure and getting them any timethey need,” An said.
“However, if they do not strictly follow the guidelines, their products mightattract high tariffs and even be returned or banned.”
Asked what enterprises should do about exports between the time the CPTPP cameinto effect, January 14, and March 8 when the circular comes into effect, hesaid: “C/Os will be issued with retrospective effect and there will be noproblems for exporters.
“For the garment sector, the CPTPP has a separate chapter and garment companiesshould study it carefully.”
According to the Ministry of Industry and Trade, the CPTPP will have a huge andpositive impact on Vietnam’s investment and trade as a whole, with the garment,footwear, and food and beverage sectors to be the biggest beneficiaries asimport tariffs will be eliminated on most of their products.
A recent study by the Ministry of Planning and Investment (MPI) found that thetrade deal could add 1.32 and 4.04 percent to Vietnam’s GDP and exports by2035.
“In terms of investment attraction, CPTPP commitments on services andinvestment will help Vietnam improve its investment climate and attract moreforeign direct investment,” it said.
“In terms of institutional reforms, the CPTPP will help Vietnam further improvethe local business and investment climate.”
Also according to the study, the deal will create an additional 20,000-26,000jobs annually.
Vietnam’s deadlines for removing tariffs are later than for other nations.Almost all nations have to reduce tariffs on Vietnamese goods as soon as thedeal takes effect, Canada on 94 percent of tariff lines, Chile on 95 percent,Japan on 86 percent, and Mexico on 77 percent.
But the rate for Vietnam is only 66 percent, increasing to 86 percent over the nextthree years.
MPI statistics show that as of October 20, CPTPP nations had invested well over120 billion USD in Vietnam, accounting for 35.7 percent of the country’s totalregistered FDI.-VNS/VNA
VNA
