For the first time, Vietnam and Peru have a free trade agreement, after the National Assembly ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The Peruvian National Assembly has just voted to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), more than 3 years since the Agreement was signed in March 2018. The South American country became the 8th country to ratify the CPTPP.
The CPTPP will come into force in Peru 60 days after it announced the ratification of the Agreement with the depositary country New Zealand. As a member that has ratified the CPTPP, Vietnam will benefit from Peru’s ratification of this Agreement, firstly promoting bilateral turnover, and secondly, the opportunity to open markets for export goods.
The main export items of Vietnam to Peru are phones, electronic components, computers, shoes, clinker, cement, textiles, seafood… Peru committed to eliminate 81% number of tariff lines as soon as the Agreement comes into effect, equivalent to 62% of export turnover from Vietnam and eliminating tariffs on 99.4% of tariff lines in the 17th year.
CPTPP marks the first time that Vietnam and Peru have a free trade agreement (FTA). According to the recommendation of the Ministry of Industry and Trade, the following exporters need to seize the opportunity soon. First, furniture products will enjoy the tax rate of 0% as soon as the Agreement comes into effect. Second, agricultural products such as cashews, tea, pepper, vegetables, and some types of coffee also enjoy 0% tax incentives. For textiles and garments, the tax rate will be reduced according to the roadmap and to 0% in the 16th year.
Peru is a potential market, annually importing about 350 million USD of footwear, mainly shoes with imitation leather or plastic components. 75% of Peruvian import and export companies are small and medium sized. Vietnamese goods have good conditions to penetrate, compete and easily go to neighboring countries of Peru such as Ecuador, Colombia, Bolivia and Brazil.
| CPTPP is a new generation free trade agreement signed on March 8, 2018 with 11 participating member countries: Australia, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Male. This Agreement officially took effect on December 30, 2018 for the first group of 6 countries to complete the procedures for ratifying the Agreement, including Mexico, Japan, Singapore, New Zealand, Canada and Australia. For Vietnam, this agreement took effect from January 14, 2019. |
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