Vietnam And Japan Lift Trade Barriers

by Mary Swire, Tax-News.com, Hong Kong

05 October 2009

The Vietnam-Japan Economic Partnership Agreement (VJEPA) became effective from October 1, and was marked by a meeting between officials in Tokyo to implement the consequent cuts in import duties in both countries.

Negotiation of the VJEPA began in January 2007, following the entry of Vietnam into the World Trade Organisation (WTO). After reaching an agreement in principle in September 2008, the agreement was signed on December 25 2008. The meeting on October 1 was the first reported meeting of the Joint Committee on the Implementation of the VJEPA.

From October 1, Vietnam has committed to cut duties on almost 2,600 products imported from Japan, while Japan has reduced duties on some 7,220 products imported from Vietnam. The main Vietnam-made exports to Japan that will immediately obtain zero import duty rates include garments and textiles, furniture, shrimp and products made from shrimp, electric cables and computers.

The VJEPA is Vietnam’s first bilateral free trade agreement since entering the WTO, and is expected to produce a large rise in trade between the two countries, despite strict Japanese quality controls. For example, it has been predicted that Vietnamese textile and garment exports to Japan could increase by up to 20% in 2009 and reach a total of USD1bn.

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