Businesses in Ho Chi Minh City have made good use of incentives under
the Vietnam–Japan Economic Partnership Agreement (VJEPA), and seen high
growth in exports to the north-eastern country.
Under the agreement, average tax rates on Vietnamese goods exported to
Japan and vice versa will be gradually cut to 2.8 percent and 7
percent by 2018 respectively.
While key export
markets like the US and EU are suffering from economic hardships,
the reduction of barriers to Vietnamese goods thanks to the VJEPA has
helped enhance exports of Vietnam and HCM City in particular.
From 2009 to 2010, Japan was the fourth largest
market of HCM City, after the US, New Zealand and
Singapore. However, with 12 percent of the city’s total export
turnover, it ranked second just after the US in 2011 and 2012.
Deputy Director of the HCM City Department of Industry and Trade
Huynh Khanh Hiep said the city’s spearhead exports to Japan are
textiles, garments, footwear, handicrafts, aquatic and wood products. It
is expected to export 492.2 million USD worth of textiles and garments
by the end of August, up 5 percent from a year earlier.
Footwear is also estimated to bring in 97million USD, an increase of 28.9 percent for the first eight months of this year.
Hiep attributed the achievement to tax incentives under the
ASEAN–Japan Comprehensive Economic Partnership Agreement (AJCEPA) and
the VJEPA that Vietnamese businesses have been benefiting from.
The VJEPA was inked in 2008, forming a stable legal framework
facilitating bilateral trade and investment. Within 10 years, Vietnam
and Japan will remove taxes, paving the way for the construction
of a full bilateral free trade area.
According to
Nguyen Thanh Vinh, a representative of the HCM City Garment, Textile,
Embroidery and Knitting Association, to make full use of trade
opportunities with the country, Vietnam needs to accelerate the
development of supporting industries for export products.
Deputy General Secretary of the Vietnam Association of Seafood
Exporters and Producers To Thi Tuong Lan urged the country’s seafood
industry to make the most of tax incentives when exporting to Japan.
In particular, it should expand its processing industry by handling
aquatic materials that are imported from ASEAN countries and re-exported
to Japan .
Opportunities also open up as
Japanese firms switch their investment from countries like China and
Thailand to Vietnam , she added.
Vice
Chairman of the HCM City Handicraft and Wood Industry Association Tran
Quoc Manh said while the AJCEPA and the VJEPA offer plenty of tax
incentives, it is vital for businesses to produce high-quality goods
with greater value and diversity to improve their competitiveness in the
Japanese market.-VNA