KOREAN
i- Overview of Trade Policy
The overall direction of the Republic of Korea's trade policy has stayed mostly unaltered since
the previous Trade Policy Review. The tariff is still one of Korea's key trade policy tools, as well
as a very important if falling, source of tax income. The customs tariff for 2021 remains
transparent but quite complicated, with a variety of rates. The average MFN tariff imposed fell
marginally from 14.1% in 2016 to 13.9% in 2021. Peak ad valorem rates remained stable as well,
and were concentrated in agricultural commodities. Korea has bound rates on 90.7% of its tariff
lines and has continued to use the difference between the average bound and applicable MFN
tariff rates to levy additional taxes (e.g. adjustment duties), which are referred to as "flexible
tariffs." Tariff rate quotas (TRQs) are still in effect.
2. SO SÁNH TRADE POLICY BETWEEN VIETNAM AND KOREAN
2.1 Applied MFN rate
In response to the outbreak of the COVID-19 pandemic, Viet Nam temporarily eliminated
applied MFN tariffs on medical and certain personal protective equipment on 7 February 2020.
The simple average applied MFN rate for all goods was 11.9% in 2020, up from 10.4% in 2013.
Only second-hand motor vehicles are subject to applied non-ad Valorem rates. The highest
tariffs include 135% for five tariff lines concerning cigarettes.
Almost 99% of Korean tariffs are ad valorem and hence transparent. Tariff rates remain in the
range of 0% to 887.4%. The
Korean tariffs might be rationalized by lowering the number of distinct rates and eliminating
decimal rates, for example. Non-ad valorem tariffs continue to include alternate taxes on a
variety of tariff items, mostly manufactured products such as cinematographic film and
diagnostic or laboratory chemicals; the particular duty on recorded videotapes that was in
existence in 2016 was replaced by a zero rate.
2.2 Tariff preferences
Viet Nam accords tariff preferences under regional and bilateral preferential trade agreements
to its ASEAN partners, Australia and New Zealand, Chile, China, the Eurasian Economic Union,
India, Japan, and the Republic of Korea.
Korea's efforts to expand its bilateral and regional free trade agreements during the review
period meant its simple average tariff rate on imports from RTAs/FTAs. Since its last Review,
Korea has kept virtually unchanged the number of items eligible for unilateral (non-reciprocal)
duty-free and quota-free tariff preferences to LDCs.
2.3 Duty concessions/exemptions
Vietnam: The exemption of import tax for medical masks, antiseptic hand sanitizer, raw
materials for export, water-based antiseptic, and materials and other necessary equipment for
the prevention and control of acute respiratory infections caused by COVID-19. Under Article 16
of the Law, import duty exemptions are extended, inter alia, to raw materials, supplies and
components imported for export production; goods temporarily imported for re-export; certain
goods and fixed assets imported for projects entitled to investment incentives; certain goods
imported to serve petroleum activities; and imported goods related to information and
technology, the environment, and education.
Korean: The Customs Act also allows duty-free imports of aircraft parts and semiconductor
manufacturing equipment not produced domestically. The revenue forgone from import duty
relief was USD 1 billion (equivalent to 12% of total tariff revenue) in 2015; no recent data were
available from the authorities
2.4 Tariff quotas
Viet Nam has tariff quotas for imports of eggs, sugar cane, tobacco, and salt issued on 15 June
2018. According to the country's Goods Schedule, quota volumes must increase by 5% annually
for goods subject to tariff quotas.
Korea imposes tariff quotas on agricultural and autonomous products( mainly for raw materials,
inputs, semi-processed goods, components, parts, and machines). Whereas in-quota tariff
rates are much lower, ranging from zero to 50%, many out-of-quota rates remain very high and
peak at 887.4%.
2.5 Bound Tariff
Viet Nam fully implemented its tariff concessions in 2019; its final bound rates average 14.7% for
all goods. Most tariff lines were initially bound in the 0%-40% range, with peaks in the initial
bound rates for "sensitive" items such as sugar (100%), wines and spirits (65%), tobacco
(80%-150%), and motor vehicles (100%). Viet Nam is a party to the plurilateral Information
Technology Agreement, with zero duty on such goods applied.
Korea bound rates at 90.7% (2021 tariff schedule) of all tariff lines in the Uruguay Round,
covering 99.7% of agricultural tariff lines and 89.2% of industrial tariff lines. Following the past
"tariffication" of non-tariff measures,
very high bound (and applied) tariffs apply to many commodities. Korea's average bound rates
on agricultural and industrial products (WTO definitions) are 69.0% and 8.8%, respectively
VIETNAM-KOREAN TRADE AGREEMENT
Basically, the tariff commitments in VKFTA are built on the basis of tariff commitments in the
ASEAN-Korea FTA (AKFTA), but with a higher degree of liberalization. Specifically, compared
to AKFTA, in VKFTA:
- Korea will remove an additional 506 tariff lines for Vietnam (accounting for 4.14% of the tariff
and equivalent to 5.5% of the total import turnover from Vietnam to Korea in 2012).
- Vietnam will remove 265 additional tariff lines for Korea (accounting for 2.2% of the tariff and
equivalent to 5.91% of the total import turnover from Korea to Vietnam in 2012).
2.1 Commitment in principle
2.1.1National Trade
The Parties undertake to accord to service and service suppliers of the other Party treatment no
less favorable than that it accords to its suppliers of services and services in the areas of
commitment.
2.2.1 MFN
If, after the VKFTA comes into force, a Party to the Agreement (Vietnam or Korea) signs
agreements with a 3rd Party that grants more favorable treatment to its services and service
suppliers, Such third party, one Party may request consultations with the other Party to consider
the possibility of increasing preferential treatment in VKFTA no less favorable than preferential
treatment in agreement with the 3rd Party. unless such preferential treatment is under existing
agreements with a Third Party or between ASEAN members.
2.2.2 Market Access
The Services Chapter in the VKFTA is still negotiated based on a positive approach
similar to that in the WTO, i.e. each Party will have a List of Commitment Areas which list
the areas of openness and the extent to which they will be affected. open, sectors not
listed as uncommitted and that Party has the discretion to regulate.
For sectors with commitments, depending on the specific content of commitments, each
Party will not adopt or maintain measures affecting service suppliers of the other Party
such as: restrictions on the number of suppliers. Service Provider; restrictions on
transaction value; restrictions on the total number of activities or outputs; limitations on
the total number of human resources to be recruited; Restrictions on the type of
business….
2.2 Commitment to market opening
Compared with the commitments to open the service market of Vietnam and Korea in
WTO and AKFTA, in VKFTA:
Vietnam is more open to Korea in 02 sub-sectors:
+ Urban planning services and urban landscape architecture
+ Rental service of machinery and other equipment without operator
Korea is more open to Vietnam in 05 sub-sectors:
+ Legal services
+ Delivery service
+ Railway maintenance and repair services
+ Support service for rail transport service
+ Natural science research and development services
THAILAND
TRADE POLICY
According to World Bank Doing Business data, in 2020, Thailand was ranked in 62nd
place (down from 59th in 2019) out of 190 economies in the ease of trading across
borders, better than the East Asia and Pacific regional average.
1. Trade policy in exports and imports
- Measures Directly Affecting Imports
+ In order to enhance trade facilitation, Customs developed several action plans to
improve processes, including the pre-arrival processing, e-Bill payment, and
e-Tracking systems. Under the e-Customs system, customs registration,
declaration, and all document submissions are conducted electronically
+ The authorities stated that, in accordance with the Customs Act B.E. 2560 (2017),
provisions on advance rulings were revised. With the intention of better facilitating
international trade, the new Customs Act allows anyone to apply for an advance
ruling on customs value, origin of goods, or customs tariff; previously, only
importers were allowed to do so.
+ Preferential rules of origin are in place for imports from Thailand's regional trade
agreement (RTA) trading partners. For goods to be eligible for preferential tariff
treatment, they must meet the origin criteria specified in the relevant RTA. Imports
from ASEAN countries are subject to the rules of origin contained in the ASEAN
Trade in Goods Agreement (ATIGA).
+ Thailand's 2020 Tariff Schedule applies the ASEAN Harmonized Tariff
Nomenclature (AHTN) consisting of 10,813 tariff lines (9,558 in 2015) at the HS
eight-digit level, in the HS17 nomenclature. Overall, tariff protection is highest on
fully processed products, and lowest on semi-processed products.
+ The Investment Promotion Act allows the Board of Investment (BOI) to request the
MoC to ban imports of goods competing with those produced by a domestic
industry, with a view to assisting the industry.
+
+
Measures Directly Affecting Exports
Exporters must submit the following documents to Customs: bill of lading, terminal
handling receipt, commercial invoice, packing list, customs declaration, certificate
of origin (if applicable), technical standards certificate (if applicable), and SOLAS
certificate (if applicable). Export declarations are submitted via the e-Export
system. Like importers, exporters may use the e-Tracking system to access export
declaration information.
The imposition of export taxes could constitute a form of assistance to domestic
downstream industries and, if they are applied to products Thailand is a major
supplier of, could exacerbate world price fluctuations.
+
+
+
+
The Government continues to offer several schemes to promote and facilitate
exports. These include bonded warehouses, duty drawback, other measures
allowing for tax and duty refunds, and tax and non-tax incentives under the
Customs free zones scheme and the Industrial Estate Authority of Thailand Act (No.
4) B.E. 2550 (2007).
Exports of goods manufactured in Thailand continue to be eligible for tax coupons,
which may be used to pay taxes and duties.
Customs has been administering a free zones (FZ) programme since 2000, aimed
at promoting investment into, and exports from, these zones.
The Department of International Trade Promotion's responsibilities include a wide
range of activities, such as formulating and proposing export promotion strategies,
providing trade information services, creating opportunities through business
matching and networking between Thai exporters and potential importers,
promoting the value creation of Thai products and services, and providing
capacity building services to Thai SMEs
TARIFF : THAILAND vs. VIETNAM
+
Similarities:
Both Vietnam’s and Thailand’s tariff applied in 2020 follows the ASEAN
Harmonized Tariff Nomenclature (AHTN), based on the HS17 nomenclature.14 The
Customs Tariff contains 10,813 tariff lines at the HS 8-digit level. From 2013-2014
to 2020, the simple average applied MFN tariff rate rose for both countries, in
which the main cause was the nomenclature change from HS12 to HS17.
+
Differences:
Tariff structure: Thailand has a relatively complicated tariff structure. Non-ad
valorem duties account for 8% of all tariff lines (860 out of 10,813). Specific duties
are applied on 37 tariff lines (mainly petroleum oils; playing cards and tables
designed for games; and undenatured ethyl alcohols). Alternate rates (the higher of
an ad valorem rate and a specific duty) apply to 823 tariff lines. It was not possible
to calculate ad valorem equivalents (AVEs) for a number of non-ad valorem tariffs.
Viet Nam bound all of its tariff lines at ad valorem rates, with the exception of 15
tariff lines applied to second-hand motor vehicles (HS 8703), which are bound at
the lower of a compound rate (150% + USD 15,000) or 200% ad valorem. It reserved
the right to apply specific or compound import duties on certain "sensitive" goods
to address customs fraud. So far, this has not proven necessary. Currently, only
second-hand motor vehicles are subject to applied non-ad valorem rates.
+
Bound rates: In the WTO, Thailand bound 76.3% of its tariff lines at the HS
eight-digit level: 100% binding on agricultural products (WTO definition), and 73%
on non-agricultural products. Seven tariff lines carry specific duties, 1,904 carry
alternate duties, and the rest carry ad valorem rates. The rates of tariff lines
carrying ad valorem rates range from zero to 226% (raw silk) for agricultural
products, and from zero to 80% (motor vehicles) for non-agricultural products.
When AVEs are included, the overall average bound tariff is 31.3%; the average
bound tariff for agricultural products is 41.7%, and that for non-agricultural
products is 29.2%. 2,557 tariff lines remain unbound.
According to the authorities, Viet Nam fully implemented its tariff concessions in
2019; its final bound rates average 14.7% for all goods. Most tariff lines were initially
bound in the 0%-40% range, with peaks in the initial bound rates for "sensitive"
items such as sugar (100%), wines and spirits (65%), tobacco (80%-150%), and
motor vehicles (100%). Viet Nam is a party to the plurilateral Information
Technology Agreement, with zero duty on such goods applied.
+
The difference between bound and applied MFN rates is greater in Thailand than in
Vietnam. Hence, potentially Thailand has ample scope to raise applied tariffs to
their bound level, while Vietnam has scope for flexibility in its tariff policy.
+
Preferential tariff: Thailand provides tariff- and quota-free access to practically
all goods originating in ASEAN partners under the ASEAN Trade in Goods
Agreement (ATIGA). Viet Nam accords tariff preferences under regional and
bilateral preferential trade agreements to its ASEAN partners, Australia and New
Zealand, Chile, China, the Eurasian Economic Union, India, Japan, and the Republic
of Korea.
+
Tariff quotas: Tariff quotas in Thailand are applied to 128 tariff lines, all of which
relate to 23 agricultural product groups, while Viet Nam has tariff quotas for
imports of eggs, sugar cane, tobacco, and salt.
+
Tariff reductions and exemptions in Thailand for the importation of machinery,
equipment and materials have been maintained, as the Government tries to
support the development of local industry, through incentive schemes provided by
the Board of Investment and the Revenue Department, among others.
BILATERAL TRADE RELATION BETWEEN THAILAND-VIETNAM
Vietnam and Thailand are two countries with close diplomatic relations and are
members of the Association of Southeast Asian Nations (ASEAN) and other
sub-regional organizations in the region. In the field of trade, the two sides recorded a
positive growth in bilateral turnover. In the context of the epidemic and many
difficulties, trade exchange in 2021 still reached 18.8 billion USD, up 17.9% compared
with 2020. The two countries agreed to continue to have closer coordination in
creating a favorable environment for import and export activities of enterprises, while
paying more attention to development solutions. Trade development in a more
balanced and mutually beneficial direction.
The group of products that Vietnam exports mainly to the Thai market includes
telephones, machinery, equipment, tools and spare parts, iron and steel of all kinds,
computers, electronic products and components... In the opposite direction. On the
other hand, Vietnamese enterprises mainly import goods from Thailand, such as
machinery, equipment, tools and spare parts, raw materials, electrical household
goods and components.
Some specific measures discussed by the two partners include: minimizing the
application and finding ways to solve unnecessary trade barriers to ensure the normal
operation of supply chains; establish an information exchange channel between
agencies in charge of trade remedies, coordinate in organizing trade promotion
activities in Thailand and Vietnam, and encourage Thai retail groups to act as bridges.
connecting Vietnamese goods to Thai consumers and consumers in countries where
Thailand has invested in developing distribution systems, seeking cooperation
opportunities in the field of logistics to support and improve commercial performance.
CHINA
a. Most Favored Nation (MFN)
China and Vietnam are WTO members and both granted the most favored nation (MFN) status.
Applied MFN tariffs in China ranged from 0%-65%; the highest tariffs of 65% apply to 20
agricultural tariff lines. In Vietnam, the simple average applied MFN tariff was 18.1% for
agricultural products (WTO definition) and 10.9% for non-agricultural products.
In China, from 2017 to 2021, there has been a decline by 2.2% in the simple average applied
MFN rate (9.3% down to 7.1%), and the tariff rates have decreased across almost all product
categories. the main decreases in tariff rates can be found under food preparations.
Viet Nam also temporarily eliminated applied MFN tariffs on some specific products like:
medical and certain personal protective equipment on 7 February 2020, in response to the
outbreak of the COVID-19 pandemic.
b. Tariff rate quotas
Quota taxes are imposed by China on a number of commodities such as wheat, corn, rice, sugar,
wool and wool, cotton, and chemical fertilizers in the subject of TRQs, ...
Whereas, Viet Nam has tariff quotas for imports of eggs, sugar cane, tobacco, and salt
c. Bound tariff
China bound 100% of its tariffs at ad valorem rates ranging from 0-65% for agriculture (WTO
definition) and 0-50% for non-agricultural products upon its admission into the WTO. The
simple average current bound rate is 9.6% (15.1% for agricultural commodities and 8.8% for
non-agricultural items); final bound rates are due in 2023.
Viet Nam bound all of its tariff lines at ad valorem rates, however, it has the exception of 15
tariff lines applied to second-hand motor vehicles (HS 8703), which are bound at the lower of a
compound rate (150% + USD 15,000) or 200% ad valorem. It reserved the right to apply specific
or compound import duties on certain "sensitive" goods to address customs fraud.
d. Preferential rates
China uses preferential tariffs in its Preferential Trade Agreements (PTAs) and regional trade
agreements (RTAs). According to a summary analysis of Chinese preferential tariff, Hong Kong,
China and Macau, China have the lowest average tariff duties. China also provides special
preferential treatment to imports from LDCs (Least Developed Countries) that have established
diplomatic ties with China and exchanged diplomatic notes. China had imposed zero tariffs on
97% of tariff lines for these 41 LDCs by February 2021.
Whereas, Viet Nam accords tariff preferences under regional and bilateral preferential trade
agreements to its ASEAN partners, Australia and New Zealand, Chile, China, the Eurasian
Economic Union, India, Japan, and the Republic of Korea
e. Tariff exemptions or concession
In China, tariff exemptions can be applied to some specified imports such as samples and
advertising materials with no commercial value and items damaged before customs clearance.
Tariff concessions can be available for commodities that are processed and exported within a
certain time frame.
Differently, Viet Nam exempts other goods from customs duties. Under Article 16 of the Law,
import duty exemptions are extended, inter alia, to: raw materials, supplies and components
imported for export production; goods temporarily imported for re-export; certain goods and
fixed assets imported for projects entitled to investment incentives; certain goods imported to
serve petroleum activities; and imported goods related to information and technology, the
environment, and education.
EU
Overview trade policy EU:
The EU's aim is a "trade policy that is transparent and responsible, benefits all citizens,
and provides modern solutions for the realities of today's economy in the middle of
technological change".
The EU is an original Member of the WTO, and each EU member State is also a WTO
Member.About the reciprocal preferences, as at 30 September 2019, the EU had 41 FTAs
in force with 72 countries.
SO SÁNH TARIFF EU-VN:
a. Tariff applied:
EU Trade Policy Review 2019: The number of non-ad valorem tariffs in the EU also
stands out, as about 10% of tariff lines are non-ad valorem, and their number increased
over the review period. Further, of the non-ad valorem tariffs, about one third are
compound, mixed, or other, meaning that it is often difficult to determine the duty rate or
calculate the real impact of the tariff.
VN Trade Policy Review 2021: Viet Nam bound all of its tariff lines at ad valorem rates,
with the exception of 15 tariff lines applied to second-hand motor vehicles (HS 8703),
which are bound at the lower of a compound rate (150% + USD 15,000) or 200% ad
valorem.
b. MFN tariff applied rate:
EU Trade Policy Review 2019
-
The simple average tariff remains at 6.3% overall.
MFN applied rates are generally identical, or close, to the WTO bound rates. The
agricultural sector continues to stand out in the tariff analysis due to significantly
higher rates (14.2% on average), the wide tariff range, and the significant use of
non-ad valorem rates and tariff quotas. For non-agricultural products, the fish and
fishery products (11.8% simple average) and clothing (11.6%) sectors stand out as
the ones with the highest tariff protection among an overall low average of 4.2%.
VN Trade Policy Review 2021
-
The simple average applied MFN rate for all goods is 11.9% in 2020, up from
10.4% in 2013.
Only second-hand motor vehicles are subject to applied non-ad valorem rates.
The highest tariffs include: 135% for five tariff lines concerning cigarettes. The
simple average applied MFN tariff was 18.1% for agricultural products (WTO
definition) and 10.9% for non-agricultural products.
c. Quotas:
EU Trade Policy Review 2019: The EU has 107 categories of TRQs in its WTO
schedule, of which 79 (74%) concern agricultural products. Agricultural TRQs cover a
diverse group of products, including meat, fruit, grains, vegetables, cheese, wine,
chocolates, etc., while non-agricultural TRQs are mainly on fish, certain metal products,
certain wood products, flax yarn, and glass beads.
VN Trade Policy Review 2021: Among agricultural products, Viet Nam has tariff quotas
on eggs, sugar cane, and tobacco. The most recent notification on imports under tariff
quotas for 2019 shows no imports of eggs under the tariff quota; about one quarter of the
sugar quota was used, and about two thirds of the tobacco quota. In addition, Viet Nam
has quotas for preferential imports of rice, paddy, and unmanufactured tobacco from
Cambodia and the Lao People's Democratic Republic.
d. Preferential:
EU Trade Policy Review 2019: The EU continues to have a number of preferential
regimes, both reciprocal and unilateral, that offer preferential duties upon importation
into the EU. The majority of the EU's FTA partners are part of the PEM Convention;
furthermore, the EU replaced the bilateral protocols of the preferential agreements with
the PEM Members with a single legal instrument using the PEM Convention.
VN Trade Policy Review 2021: Viet Nam accords tariff preferences under regional and
bilateral preferential trade agreements to its ASEAN partners, Australia and New
Zealand, Chile, China, the Eurasian Economic Union, India, Japan, and the Republic of
Korea
Trade agreement between EU and VietNam:
European Union-Viet Nam Free Trade Agreement (EVFTA)
-
-
-
The free trade agreement between Viet Nam and the European Union was signed
on 30 June 2019, and was ratified by the National Assembly on 8 June 2020. The
Agreement entered into force on 1 August 2020. 2.47.
Under the Agreement, Viet Nam is expected to eliminate 98.3% of its total tariff
lines for goods originating from the European Union over a period of 10 years; on
the application day of the Agreement, 48.5% of total tariff lines were zero-rated.
For the remaining 1.7% of lines, tariffs may be reduced over a period longer than
10 years, or tariff rate quotas, in line with Vietnamese WTO commitments or
under the category of Completely Knocked Down, may be applied. 2.48.
Under the Agreement, while Viet Nam does not impose export duties on most
goods, it reserved the right to impose export duties on 57 lines, most of which are
commodities, such as crude oil or coal, that are already subject to export duties
=> The FTA will eliminate nearly all tariffs (over 99%):
● Vietnam will liberalize 65% of import duties on EU exports to Vietnam at
entry into force, with the remainder of duties being gradually eliminated
over a 10-year period.
● EU duties will be eliminated over a 7-year period.
A few concrete examples:
● Almost all EU exports of machinery and appliances will be fully liberalized
at entry into force and the rest after 5 years.
● Motorcycles with engines larger than 150 cc will be liberalized after 7 years
and cars after 10 years, except those with large engines (>3000cc for petrol,
> 2500cc for diesel) which will be liberalized one year earlier.
● The totality of EU textile fabric exports will be liberalized at entry into
force.
● Close to 70% of EU chemicals exports will be duty free at entry into force
and the rest after 3, 5 and 7 years.
Vietnam will also open its market for most EU food products, both primary and
processed:
● Wines and spirits will be liberalized after 7 years.
● Frozen pork meat will be duty free after 7 years, beef after 3 years, dairy
products after a maximum of 5 years and food preparations after a maximum
of 7 years.
● The chicken will be fully liberalized after 10 years.
JAPAN
SO SÁNH TRADE POLICY
❖ MFN applied tariffs
(Trade Policy Vietnam 2021) The simple average applied MFN rate for all goods is 11.9%,
compared with 10.4% in 2013; 18.1% for agricultural goods; and 10.9% for non-agricultural
products. The main reason for the increase in the overall tariff average is due to the change from
the HS12 to the HS17 nomenclature and the splitting of several tariff lines, mainly in the
"transport equipment section (HS Section 17)". The highest tariffs include: 135% for five tariff
lines concerning cigarettes; 100% for two tariff lines concerning certain tobacco products such as
cigars, cheroots, and cigarillos; and worn clothing and other worn articles .
(Trade Policy Japan 2020) In FY2019, Japan's overall simple average applied MFN tariff rate
was 6.3% (up from 6.1% in FY2016). This was mainly due to higher ad valorem equivalents
(AVEs) and, to a much lesser extent, because of a HS nomenclature change. Import duties on
agricultural products are higher than duties on non-agricultural products: the simple average for
agriculture is 17.9% (16.3% in FY2016), compared with 3.5% for non-agricultural products
(3.6% in FY2016).
❖ Bound tariff
All of Viet Nam's tariffs are bound. Viet Nam bound all of its tariff lines at ad valorem rates, with
the exception of 15 tariff lines applied to second-hand motor vehicles (HS 8703), which are
bound at the lower of a compound rate (150% + USD 15,000) or 200% ad valorem. Whereas,
Japan has bound 91.8% of its tariff lines (including partially-bound lines). 175 lines are unbound,
these relate mainly to fisheries (fish, crustaceans, and seaweed), petroleum oils, and wood and
articles thereof.
❖ Tariff reductions and exemptions
Viet Nam exempts various goods from customs duties. Import duty exemptions are extended to
raw materials, supplies and components imported for export production; goods temporarily
imported for re-export; certain goods and fixed assets imported for projects entitled to
investment incentives; certain goods imported to serve petroleum activities; and imported goods
related to information and technology, the environment, and education. Tariff exemption also
extends to certain goods, which are bought, sold, or exchanged across the border by border
residents within allowable quotas. (In response to the outbreak of the COVID-19 pandemic, the
manufacture of oxygen respirators that are exempt from import tax for COVID-19 epidemic
prevention and control.)
Japan applies customs duty reduction and exemptions to develop domestic industries, to
promote trade and science, to meet requirements associated with social welfare, and to eliminate
double taxation. There are two types of customs duty exemptions: (i) a permanent system, as set
out in the Customs Tariff Law; and (ii) a temporary system, as set out in the Temporary Tariff
Measures Law. Customs Tariff Law provides for duty reductions/exemptions in cases where the
prices of imported daily necessities have increased (to prevent price increases of daily
necessities, such as food and clothing), to maintain stability in people's everyday lives. The
merchandise goods currently subject to such duty reductions/exemptions are imported rice,
hulled or unhulled; barley; wheat foodstuffs; apparel; and other goods which are closely related
to people's daily lives.
❖ Preferential tariff
Viet Nam accords tariff preferences under regional and bilateral preferential trade agreements to
its ASEAN partners, Australia and New Zealand, Chile, China, the Eurasian Economic Union,
India, Japan, and the Republic of Korea. Japan offers preferential tariff rates to 128 developing
countries and 5 territories under the GSP; and 46 LDCs receive additional preferences.
Japan also grants preferential access under its RTAs with ASEAN, Australia, Brunei
Darussalam, Chile, CPTPP Member economies, the European Union, India, Indonesia, Malaysia,
Mexico, Mongolia, Peru, Philippines, Singapore, Switzerland, Thailand and Viet Nam. Under
Japan's RTAs, preferential tariffs significantly increased market access for these trading partners.
THE U.S
OVERALL: The economic relations between Vietnam and the U.S. have expanded rapidly over
more than 25 years. Compared to 2020, there is a 21 billion USD increase in the US - Vietnam
trade turnover, hitting more than 111 billion USD in the year 2021. According to the General
Department of Customs, as a result of this strong collaboration, the United States has become
Vietnam's second-largest trading partner (after China). At the same time, Vietnam was the
United States’ 10th largest commercial partner.
*SO SÁNH TARIFF
a. Applied rates
(Trade Policy Vietnam 2021) The simple average applied MFN rate for all goods is 11.9%,
compared with 10.4% in 2013; 18.1% for agricultural goods; and 10.9% for non-agricultural
products. The main reason for the increase in the overall tariff average is due to the change from
the HS12 to the HS17 nomenclature and the splitting of several tariff lines, mainly in the
"transport equipment section (HS Section 17)". The highest tariffs include: 135% for five tariff
lines concerning cigarettes; 100% for two tariff lines concerning certain tobacco products such as
cigars, cheroots, and cigarillos; and worn clothing and other worn articles .
(Trade Policy US 2018) The MFN tariff regime is characterized by stability, mostly with low or
no tariffs. Overall, the average tax rate is at 4.8% and has barely changed over the years. 37.5%
of tariff lines are exempt. With 30.4% of the tariff lines, the items are subject to import tax of 5%
or less. Agricultural products, in particular dairy products, peanuts, and tobacco, are subject to
the highest tax rates. In addition, the above-average rate applies to textiles, apparel and footwear.
(Trade Policy US 2022) The U.S. MFN applied tariff rates did not change significantly during
the review period, and essentially remain the same as the levels in 201. The simple average rate
remains low at 4.8% overall. The tariff protection afforded to the agricultural sector was,
however, significantly much higher, 9.2% on average, more than double that of the
non-agricultural sector (4.0%). The United States maintained a significant number of duty-free
tariff lines (38.4%) that increased slightly from 2018 (37.5%). Although tariff averages remain
low, there are 6.9% of all tariff lines as peak tariffs, and 2% have very high rates of above 25%.
There is a high amount of predictability in U.S. tariffs as applied tariffs are essentially at the
same level as the WTO bound rates (thuế ràng buộc của WTO)
B. Tariff Quota (hạn ngạch thuế quan)
(Trade Policy Vietnam 2021) Viet Nam has tariff quotas for imports of eggs, sugar cane,
tobacco, and salt. According to the country's Goods Schedule, quota volumes must increase by
5% annually for goods subject to tariff quotas.
Viet Nam also has tariff quotas for preferential imports of rice, paddy, and unmanufactured
tobacco from Cambodia and Lao People's Democratic Republic in accordance with bilateral
memoranda concluded in 2005 (Lao People's Democratic Republic) and 2007 (Cambodia).
In-quota volumes are subject to 0% import duty. The tariff quotas, which are announced by the
MOIT, may be stipulated for one or two years at a time. Currently, for Cambodia, quota volume
is 300,000 tonnes of rice equivalent20 and 3,000 tonnes of unmanufactured tobacco each year for
2019 and 2020, and for Lao People's Democratic Republic, quota volume is 70,000 tonnes of
rice equivalent and 3,000 tonnes of unmanufactured tobacco each year for 2018 and 2019.
(Trade Policy US 2018) The US maintains 54 tariff quotas (TRQs), including 1.9% of the tariff
lines in HTSUS. Of which, 19 TRQs are related to the dairy sector (dried milk, butter, butter oil,
cream, cheeses, ice cream, etc.), and 6 are covered with cotton. Other imported items subject to
TRQs include beef, peanuts, peanut butter, etc.
(Trade Policy US 2022). As of 2021, there were 44 TRQ categories covering 203 tariff lines of
agricultural products, however, two categories (certain dairy and sugar products) have separate
licensing procedures and quota allocation regulations.
The United States has regularly reported its utilization of agricultural TRQs to the WTO
Committee on Agriculture. The quota fill rate averaged around 50% across all categories during
2018-20 with little variation each year, i.e. 51%-55%. TRQs were not utilized or very little
utilized for certain cotton categories, animal feed containing milk, chocolate, and certain U.S.
cheeses. However, for cocoa powder, mandarins, and mixed condiments, the TRQs were
essentially fully utilized during the period.
Other TRQs, i.e. non-agricultural, are provided for in the same manner through specific tariff
lines in the HTSUS. These long-standing TRQs provide lower in-quota duties for tuna,
broom-corn brooms, and whisk brooms. During the review period, quota utilization of the
brooms was relatively low (lower than 15% in each year) whereas the tuna quota was fully
utilized each year (Table 3.8). The TRQ quantity for tuna changes each year as a function of U.S.
consumption from the preceding calendar year; it is currently set at 4.8% of consumption and is
announced annually in the Federal Register by the CBP based on reports by the National Marine
Fisheries Service.
C. Bound tariff
(Trade Policy Vietnam 2021) All of Viet Nam's tariffs are bound. Viet Nam bound all of its
tariff lines at ad valorem rates, with the exception of 15 tariff lines applied to second-hand motor
vehicles (HS 8703), which are bound at the lower of a compound rate (150% + USD 15,000) or
200% ad valorem.
(Trade Policy US 2018) In Schedule XX, the United States has bound all its tariffs (except for
two tariff lines) and all "other duties and charges" (ODCs) within the meaning of the GATT. Left
unbound for reasons of national security, the two tariff lines concern crude petroleum (HS
2709.00.10 and 2709.00.20). Except for seven tariff lines, all ODCs are bound at zero.
(Trade Policy US 2022) There have been no changes to the United States' bound tariff rates since
the last Review and, on average, they remain at 4.8%.53 Tariffs in Chapters 1 to 97 in the U.S.
Schedule remains fully bound except two tariff lines on crude petroleum (HTS 2709.00.10 and
2709.00.20). The United States has "other duties and charges" bound at zero, except seven tariff
lines, bound at higher levels, and maintains the SSG provision on 194 HS 2017 tariff lines at the
8-digit level.
D. Tariff reductions and exemptions
(Trade Policy Vietnam 2021) Viet Nam exempts various goods from customs duties. Import
duty exemptions are extended to raw materials, supplies and components imported for export
production; goods temporarily imported for re-export; certain goods and fixed assets imported
for projects entitled to investment incentives; certain goods imported to serve petroleum
activities; and imported goods related to information and technology, the environment, and
education. Tariff exemption also extends to certain goods, which are bought, sold, or exchanged
across the border by border residents within allowable quotas. (In response to the outbreak of the
COVID-19 pandemic, the manufacture of oxygen respirators that are exempt from import tax for
COVID-19 epidemic prevention and control.)
(Trade Policy US 2018) The US has 14 FTAs ​in effect with 20 countries with the aim of
promoting free trade by reducing tariff barriers. In addition, the establishment of the Generalized
System of Preferences (GSP) has provided special duty-free privileges to goods from developing
countries (including Vietnam) that meet certain conditions. The GSP program provides duty-free
treatment to more than 3500 products from 121 developing countries, contributing to economic
growth in developing and least developed countries (LDCs).
E. Preferential tariff
(Trade Policy Vietnam 2021) Viet Nam accords tariff preferences under regional and bilateral
preferential trade agreements to its ASEAN partners, Australia and New Zealand, Chile, China,
the Eurasian Economic Union, India, Japan, and the Republic of Korea.
(Trade Policy US 2018) Each FTA concluded by the United States has its own set of origin
criteria. The variety of methods applied reflects the outcome of the negotiations, including
industry preferences for particular methods, notably in textiles. NAFTA and other FTAs
concluded by the United States have incorporated a change in tariff classification ("tariff shift")
method to determine eligibility for FTA benefits. However, it also uses other methods, e.g.
local/regional value content or technical criteria, to determine origin beyond the "wholly
obtained" criterion. Importers claiming preferential tariff treatment must certify the origin of the
goods and present certificates of origin or other supporting documents when requested by CBP.
NAFTA prescribes a specific format for the certificates of origin, but most other FTAs or
preferential agreements do not.
(Trade Policy US 2022) The United States continues to conduct the majority of its trade through
MFN trade, although it has a long tradition of offering unilateral preferences to developing and
least developed countries and more recently through an increasing number of bilateral or
regional reciprocal FTAs, some of which were recently amended.
The United States has14 FTAs with 20 countries.20 The main development during the review
period was the conclusion and implementation of the revised agreement with Canada and
Mexico, replacing the North American Free Trade Agreement (NAFTA),
*Impact of trade policy in US on trade relations with Vietnam
Since the U.S.-Vietnam Bilateral Trade Agreement became operative in 2001, there has been a
dramatic escalation of trade between the two countries. More specifically, Vietnam was the U.S.
's 10th largest goods business associated with $89.5 billion in total (two-way) goods trade and
Vietnam was the United States' 6th largest supplier of goods imports during 2020 (U.S
Department of State, 2021). The United States and Vietnam have achieved a trade and
investment framework agreement that made trade relations between the United States and
Vietnam grow significantly. Thanks to the United States - Vietnam Bilateral Trade Agreement,
Vietnamese firms came up with an opportunity to enter into the broad markets of the United
States, assisting in the development of traditional items in which Vietnam has a comparative
advantage, in particular, labor-operated products. The Agreement means US imposed tariffs that
have been reduced from an average of 40% to less than 3% for Vietnam’s products (Manyin,
2002).
INDIA
A. Introduction
India joined WTO on 1 January 1995.
India also implemented India – ASEAN Services and Investment Agreement and expanded
the coverage of the Asia Pacific Preferential Trade Agreement (APTA).
India ratified the WTO Trade Facilitation Agreement (TFA) on 22nd April 2016.
68th on the Trading Across Borders indicator in World Bank's Doing Business Report
2019. India continued to liberalize its policies on FDI, further permitting FDI up to 100%.
B. TARIFF
1. Applied Tariff
INDIA Trade Policy Review 2020: quite lower than the bound tariff.
Applied tariffs and other customs duty rates that apply to imports are published on the India
Trade Portal, which was launched in 2018t. With some types of goods, the binding overhang is
only 4,6%, with 36,7% of bound tariff and 35,1% of MFN applied tariff.
Ad valorem and non-ad Valorem: 2020/21: the applied MFN tariff consisted of 11,900 lines at
the eight-digit level in the HS 2017 nomenclature;
- AVEs: 93.9% of all tariff lines are subject to ad valorem rates.
- 725 tariff lines (6.1% of the total) subject to non-ad Valorem rates
+ 3 are subject to specific rates
+ 721 (697 in 2015) have mixed duties (ad valorem and/or a specific duty
component)
+ Mixed duties continue to apply to textiles and clothing (714 tariff lines) and
natural rubber products (7 lines)
- Tariff structure: removed 7, the additional duties and special additional duties (GST
2017). The 10% social welfare charge, applies only to imports.
VN Trade Policy Review 2021: Viet Nam bound all of its tariff lines at ad valorem rates, with
the exception of 15 tariff lines applied to second-hand motor vehicles (HS 8703), which are
bound at the lower of a compound rate (150% + USD 15,000) or 200% ad valorem. The main
reason for the increase in the overall tariff average is due to the change from the HS12 to the
HS17 nomenclature and the splitting of several tariff lines, mainly in the "transport equipment
section (HS Section 17).
2. Bound Tariff
INDIA Trade Policy Review 2020:
High bound rates (In the Uruguay Round, India bound 75.3% of its Tariff Schedule)
India's simple average bound tariff has increased from 48,5% in 2017 to 50,8% in 2021. As with
the applied MFN rates, most bound rates are ad valorem (92%); only textiles and clothing are
bound at mixed duties, and two lines (almonds) are bound at specific rates. India bound 100% of
the tariff lines related to agricultural products, at rates ranging from 10% to 300%, and 71.7% of
the tariffs applied to non-agricultural products. The latter were bound at lower tariff rates,
ranging from zero to 150%. The highest bound rates apply to oils seeds, fats, oils, and their
products (HS15).
VN Trade Policy Review 2021:
Trade Policy Vietnam 2021 All of Viet Nam's tariffs are bound. Viet Nam bound all of its tariff
lines at ad valorem rates, with the exception of 15 tariff lines applied to second-hand motor
vehicles (HS 8703), which are bound at the lower of a compound rate (150% + USD 15,000) or
200% ad valorem.
3. MFN tariff:
INDIA Trade Policy Review 2020:
- Increased from 13% in 2014/15 to 14.3% in 2020/21, and to 15.4% if ad valorem
equivalents (AVEs) are considered.
- The highest rates, above 60%, apply to products such as alcoholic beverages (150%),
followed by animals and their products; fruit, vegetables, and plants; coffee and tea; and
certain motor vehicles, all with tariffs of 100%.
VN Trade Policy Review 2021:
- The simple average applied MFN rate for all goods is 11.9% in 2020, up from 10.4% in
2013.
- Only second-hand motor vehicles are subject to applied non-ad valorem rates.
- The highest tariffs include: 135% for five tariff lines concerning cigarettes. The simple
average applied MFN tariff was 18.1% for agricultural products (WTO definition) and
10.9% for non-agricultural products.
4. QUOTAS
INDIA Trade Policy Review 2020:
India has MFN tariff rate quotas (TRQs) for skimmed milk and some types of cream, maize, and
some oils. TRQs were also negotiated under preferential agreements with Nepal and Sri Lanka.
In general, there are no imports under TRQs.
VN Trade Policy Review 2021: Viet Nam has tariff quotas for imports of eggs, sugar cane,
tobacco, and salt. According to the country's Goods Schedule, quota volumes must increase by
5% annually for goods subject to tariff quotas. Among agricultural products, Viet Nam has tariff
quotas on eggs, sugar cane, and tobacco. The most recent notification on imports under tariff
quotas for 2019 shows no imports of eggs under the tariff quota; about one-quarter of the sugar
quota was used, and about two-thirds of the tobacco quota. In addition, Viet Nam has quotas for
preferential imports of rice, paddy, and unmanufactured tobacco from Cambodia and the Lao
People's Democratic Republic. In-quota volumes are subject to 0% import duty. The tariff
quotas, which are announced by the MOIT, may be stipulated for one or two years at a time.
5. Reduction and exemption
INDIA Trade Policy Review 2020:
India continues to maintain a number of tariff concessions or exemptions that are granted on the
grounds of public interest. Concessions may be granted based on end-user conditions. Imports of
goods into India for display or use at specified events are exempt from customs duties, subject to
a declaration by the importer indicating the nature of the exhibition
VN Trade Policy Review 2021:
Viet Nam exempts various goods from customs duties. Import duty exemptions are extended to
raw materials, supplies, and components imported for export production; goods temporarily
imported for re-export; certain goods and fixed assets imported for projects entitled to
investment incentives; certain goods imported to serve petroleum activities; and imported goods
related to information and technology, the environment, and education. Tariff exemption also
extends to certain goods, which are bought, sold, or exchanged across the border by border
residents within allowable quotas. (In response to the outbreak of the COVID-19 pandemic, the
manufacture of oxygen respirators that are exempt from import tax for COVID-19 epidemic
prevention and control.)
6. Tariff preferences:
INDIA Trade Policy Review 2020: Specially preferential tax rates (FTA tax rate)
The importer must submit a certificate from the Gems and Jewellery Export Promotion Council
(GJEC) in the case of precious stones or jewelry. India grants duty-free quota-free access to
LDCs through its DFTP Scheme, which came into effect in 2008. India grants dutyfree access on
94.2% of all tariff lines; around 2.6% (309 lines) of the tariff is excluded from the Scheme, while
reduced rates (with a margin of preference ranging from between 10% and 60% of the MFN rate)
of preferential duties are offered for 3.2% (374 lines) of the tariff.
VN Trade Policy Review 2021:
Viet Nam accords tariff preferences under regional and bilateral preferential trade agreements to
its ASEAN partners, Australia and New Zealand, Chile, China, the Eurasian Economic Union,
India, Japan, and the Republic of Korea. Japan offers preferential tariff rates to 128 developing
countries and 5 territories under the GSP, and 46 LDCs receive additional preferences.
7. Trade Agreements:
Vietnam and India currently have one trade agreement called the ASEAN-India Free Trade Area
(AIFTA). AIFTA creates a free trade area between ASEAN and India. It was signed on 8th,
October 2003 in Indonesia, and the final agreement was signed on 13th August 2009.
In the financial year between 2017 and 2018, the bilateral trade between India and ASEAN
increased by 14% to reach $81,3 billion. India’s imports from ASEAN were at $47,13 billion
while its exports to ASEAN reached $34,2 billion, according to the India Department of
Commerce.
-----------------------------------------------------------------------------------------------------------------Export: Tariff measures
The export tariffs in India are determined by rigorous adherence to the "Harmonized Commodity
Description and Coding System" for classifying tariff items. According to India's EXIM policy,
the country now has export tariff rates for a variety of goods and services.