The phasing out of tariffs on nearly 500 seafood and agricutural imports from China over the next four years was approved in a decree from the Prime Minister lastweek.
Vietnam must make the cuts under the ASEAN-CHINA comprehensive economic co-operation framework agreement, signed in September, 2002 as a precursto an ASEAN-China Free Trade Area.
Deputy finance Minister, Lê Thi Bang Tam, said eggs and poultry are two of the 26 producls excluded from the "early harvest programme", the free-trade protocol in the framework that officially took effect on January 1st this year. In turn, China has agreed to phase out import taxes on 536 Vietnams imports before January 1st, 2006, under the programme.
The cuts schedule feach of he 484 imports listed by the Prime Minister in the decree, depend on the tariffs they pay now.
Products that pay a tariff of 5 per cent from now until 2006, will pay just 3 per cent in 2007, and pay none from January 1st, 2008.
Similarly, products that currently pay a 10 per cent tariff will pay 5 per cent fthe 2006-07 period, and pay no tariffs from 2008.
Product tariffs of 20 per cent will be cut to 15 percent by 2005, 10 per cent by 2006 and 5 per cent by 2007, and cancelled in 2008.
China will this year cut import taxes of more than 15 per cent to 10 per cent. Products that are taxed between 5 and 10 per cent will have their cut rate cut to 5 per cent and tariffs of less than 5 per cent will be cut to zero.
Benefits challenges: Vietnamese enterprises are worried the tariff reductions will unleash a flood of Chinese goods onto the local market. However, the Ministry of Trade said the products subject to tariff cuts were not China'' s key exports to Vỉệt Nam. The Trade ministry said the Chinese products, which include eggs, seafood, mushrooms, feathers, fresh fruit and chicken, could not compete with those made in Vietnam as they entered in small ammounts through mainly bordering areas.
Moreover, the ministry said, Việt Nam''s key seafood and agricultural exports to China, which account froughly 28 per cent of the country '' s total export turnover and have a high tax rate of more than 15 per cent could get the reduction right at the beginning of the tariff elimination programme.
Only 1.7 per cent of Vietnam imports from China are seafood and agricultural products. Vietnam imported US$28 million of those products from China in 2001, according to ministry statistics, while Vietnam exported more than US$360 million worth to China.
The ministry said it expected the early harvest programme would benefit Việt Nam'' s exports by roughly US$389 million – US$200 million from seafood....
