HANOI, Aug 3 (Reporting ASEAN) – The ASEAN Economic Community (AEC) will be officially established in a few months providing great opportunities for Vietnamese businesses to increase exports to this market. However, reducing the tariff rate to zero percent is also creating major challenge. Businesses now need to become active to adapt to the new playing field.
Opportunities to increase exports
AEC will be formed at the end of 2015. By making of the most of tariff preferences in trade with AEC countries, Vietnam will have a huge opportunity to export key commodities such as textiles, rice, seafood and electronic components to ASEAN countries. Following international commitments, by 2018, 97 percent of goods imported from ASEAN countries will be duty-free. Currently, the 10 ASEAN countries are creating a production-consumption zone with 620 million consumers and total gross domestic product (GDP) of about US$2.5 trillion per year.
Since joining ASEAN in 1995, Vietnam has reduced the import tariffs for certain categories of goods. By 2015 Vietnam will reduce 90 percent of tariff lines to 0-5 percent. By 2018 Vietnam will remove tariff quotas for four categories of goods including sugar, salt, poultry eggs and raw tobacco.
Most of Vietnamese goods have been exported to neighboring countries like Laos, Cambodia and Myanmar. But as integration is increasing, new markets for Vietnam will also be available such as Indonesia, Thailand, Singapore and Malaysia, without much pressure in terms of law and tax.