Opportunities should be seized
The Vietnam- Japan Economic Partnership Agreement officially took effect on October 1 this year. Under this agreement, at least 86 percent of Vietnamese agro-forestry-aquatic products will enjoy preferential tax rates. For example, the import tax rate on shrimp products will be reduced to 1-2 percent.
However, to take advantage of this opportunity, Tran Ba Cuong, Head of Product Origin and Quality Control Section under the Export-Import Department of the Ministry of Industry and Trade recommends businesses meet the requirements of Japan’s rule of origin and qualify for its reduced tariff.
Another opportunity is that the demand for agro-forestry-aquatic products in many markets is recovering while the supply of some of these products is dropping.
The coffee output of big coffee exporters such as Brazil and India has fallen by 6 percent due to harsh weather and aging trees. Meanwhile, Belgium-Vietnam’s biggest coffee market - is increasing its demand.
Aquatic products are being much sought after again by major markets. The Republic of Korea is expected to import more than 7,300 tonnes of shrimps this year while new markets, particularly in Muslim countries are keen on importing large volumes of seafood from Vietnam.
According to the Vietnam Association of Seafood Exporters and Processors (VASEP), Muslim states with 1.8 billion people accounting for 25 percent of the global population are a lucrative potential market.
Barriers should be removed
Ensuring material resources is the biggest problem for the seafood sector. VASEP Vice President Nguyen Huu Dung says that domestic resources can only meet the needs of half of Vietnam’s 700 seafood companies and the North only meets 20 percent. At the same time, import tax rates on resources are very high, causing a lot of problems for businesses.
Regarding the tax policy, General Secretary of the Vietnam Wood and Forestry Association Nguyen Ton Quyen complains about the re-imposition of taxes by the Ministry of Finance on imported wood products without giving any reason. A tax rate of 10 percent is also levied on domestic wood products. Many businesses are in a predicament to sign export contracts due to an increase in the price of materials prices and a decrease in selling prices.
In addition to a tax reduction, it is essential to monitor the wood product control process, grant wood export certificates and issue specific guidelines to help wood exporters deal with technical barriers created by key markets such as the EU and the US, Quyen insists.
Export earnings of agro-forestry and aquatic products is estimated to reach US$3.05 billion in the three remaining months of this year, bringing total export turnover for the whole year to US$12.4 billion, down 5.9 percent from last year.