All seafood exports from Vietnam to Canada and Japan will not be taxed starting 14 January, when the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) takes effect for Vietnam.
The pact already came into force on 30 December, 2018 for Australia, Canada, Japan, Mexico, New Zealand, and Singapore – the first six signatories which had ratified the pact last year. The CPTPP also includes Vietnam, Peru, Chile, Brunei, and Malaysia.
Vietnam’ National Assembly approved CPTPP on 12 November; the measure becomes effective on 14 January this year.
Import taxes on the majority of seafood products from Vietnam will be abolished either at once or up to three years after CPTPP becomes effective.
“All seafood products (from Vietnam) exported to Canada and Japan will enjoy zero percent import tax when the agreement comes into force,” Vietnam’s Ministry of Industry and Trade said in a statement on 11 January.
Vietnam exported to Canada seafood products worth USD 240.6 million (EUR 209.7 million) in 2018, up nearly 8 percent from 2017, latest Vietnamese customs data showed.
According to Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam was the biggest supplier of shrimp for Canada between January and September last year, accounting for 29 percent of Canada’s total shrimp import value of USD 358.2 million (EUR 312.4 million) in the period. Major competitors of Vietnamese shrimp exporters in Canada include India, China, Thailand, and Indonesia, which are not members of CPTPP.
The value of tuna exports from Vietnam to Canada in the first nine months of 2018 was nearly USD 11 million (EUR 9.59 million), up 13.5 percent year-on-year. In Canada, tuna exporters from Vietnam had to compete against those from Thailand, the Philippines, and others. Currently, Thailand is dominant in exports of canned tuna to Canada. But with the taxes on canned tuna from Vietnam being removed from current 4 percent, Vietnam’s canned tuna products are expected to become competitive against those from Thailand, which are imposed taxes of 5.8 percent.
Japan and the Association of Southeast Asia Nations where Vietnam is a member signed a free trade agreement in 2008, but import taxes under that pact on certain products of tuna, cod species, surimi, shrimp, and crab from Vietnam were not removed. Now the CPTPP exporters of those products will benefit from zero percent taxes.
The value of seafood exports from Vietnam to Japan last year was USD 1.39 billion (EUR 1.21 billion), rising 6.9 percent year-on-year.
Vietnam is also the biggest supplier of shrimp for Japan. In the first nine months of 2018, Vietnam exported shrimp worth USD 453.3 million (EUR 395.5 million), down 11.7 percent year-on-year. Thailand, India, and Indonesia are main competitors of Vietnam in shrimp exports to Japan.
Vietnam exported tuna worth USD 14 million (EUR 12.2 million) to Japan in the first half of 2018, rising 32 percent year-on-year. Vietnam along with Thailand, the Philippines, China, and Indonesia were major suppliers of tuna for Japan in the period.
Import taxes under CPTPP are normally removed right after the agreement becomes effective or after 3-7 years. But a few of taxes will only be abolished after 20 years.
Mexico, for example, will remove taxes on Vietnam’s pangasius exports three years after the agreement takes effect, the Vietnamese ministry said.
