According to Vietnam’s “Vietnam News” on August 3, Vietnamese experts believe that most local textile and garment enterprises in Vietnam are difficult to benefit from the free trade agreement. Since most textile and garment raw materials rely on imports and there are insufficient auxiliary supporting industries, it is difficult to Meeting the requirements of the rules of origin in the free trade agreement will result in the inability to enjoy the preferential tax rate arrangement of the free trade agreement.
Vietnam’s textile and garment industry imports about 70% of raw materials for production, most of which are imported from China. Products that enjoy preferential tax rates under the free trade agreement must meet certain rules of origin and must provide evidence such as a Certificate of Origin (C/O). Each free trade agreement has different rules of origin and issues its own certificate of origin. If the ASEAN Free Trade Agreement applies, textiles cut-manufactured-trimmed in Vietnam can obtain a certificate of origin. However, if the Vietnam-Japan Free Trade Agreement or the ASEAN-Japan Free Trade Agreement applies, the applicable rules of origin are the rules of origin starting from spinning. For Vietnamese textiles that import raw materials for spinning, it is difficult to meet the rules of origin. Require.
In addition, Vietnam’s Ministry of Planning and Investment stated that more than half of Vietnam’s textile and apparel products can make full use of the free trade agreement benefits, but most of them are implemented by Vietnamese foreign-invested enterprises. Local businesses are unable to take advantage of the benefits of free trade agreements due to a lack of awareness and knowledge.
According to statistics, Vietnam has signed 12 free trade agreements, 10 of which have come into effect (including Vietnam-ASEAN, ASEAN-Australia-New Zealand, ASEAN-China, Vietnam-Japan, Vietnam-South Korea, Vietnam-Eurasia Economic Alliance Free Trade Agreement, etc.). From 2016 to 2020, most tax items and tax rates in the free trade agreement will be significantly reduced or even eliminated. Rules of origin make it difficult for Vietnamese textile and clothing companies to benefit from the free trade agreement
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