EVFTA will open chance to export textiles to EU
The textiles industry has chanced to expand export market from EVFTA. Photo: Nguyễn Huế |
In 2019, the EU imported $4.4 billion of goods from Vietnam, increasing 2.2 percent over the previous year. Clothing accounts for about 10 percent of total import turnover of the EU from Vietnam.
According to SSI's analysis, Vietnam benefited from the EU's Generalized System of Preferences (GSP) for developing countries, with a preferential tariff rate of 9 percent for some limited tariff lines. After the EVFTA takes effect, the tariff rate under most favored nation treatment (MFN) will automatically replace the GSP tax rate. It means that in the first two years of implementation of EVFTA, most domestic garments will not benefit from the EVFTA, because the MFN tariff rate for these products is actually higher than the tax rate of GSP which is 9 percent currently.
Specifically, most Vietnamese products exported to the EU will experience the removal of export tariffs which will be gradually removed from the MFN tariff from 12 percent to 0 percent within 3 to 7 years after the EVFTA comes into effect. The products that will receive immediate tax reductions are goods items that are not Vietnam's main exports to the EU like yarn.
According to the rules of origin in EVFTA (ROO), fabrics used to produce products must originate from Vietnam or the EU, and tailoring stages must be done in Vietnam. There are a number of flexible points, such as garments manufactured in Vietnam, made from fabrics originating in Korea and have FTA, it will also be eligible for tax exemptions. However, more than 60 percent of fabrics imported into Vietnam are from China and Taiwan, with prices was much lower than those imported from Korea. This makes it difficult for local companies to take advantage of preferential tax rates.
Related News
Taking advantage of EVFTA: "It's impossible for everyone's house to shine brightly"
13:48 | 01/12/2023 Import-Export
Exploit EVFTA to add sustainable value to exported agricultural products
10:53 | 17/11/2023 Import-Export
3 years of EVFTA implementation: tremendous potential still exists in export growth
19:42 | 12/11/2023 Import-Export
3 years of EVFTA implementation accessed: significant room remains for Vietnam to capitalize
09:52 | 07/11/2023 Import-Export
Latest News
Export turnover reaches over US$200 billion in the first half of April
15:04 | 28/04/2024 Import-Export
Experts call for efforts in protecting IP rights
15:02 | 28/04/2024 Import-Export
Policies needed to encourage e-commerce to embrace circular economy
15:00 | 28/04/2024 Import-Export
To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits
06:15 | 28/04/2024 Import-Export
More News
Efforts to supply US $ one billion of raw materials and cosmetics to replace imported goods
06:14 | 28/04/2024 Import-Export
Ample room for Quang Ninh to attract FDI
19:47 | 27/04/2024 Import-Export
Vietnam’s rice exports may exceed 2024 target
19:46 | 27/04/2024 Import-Export
Opportunity for exporting to Thailand market
14:48 | 27/04/2024 Import-Export
Enterprises want clearer regulations on seafood production
14:05 | 26/04/2024 Import-Export
Vietnam ranks fifth among aquatic product suppliers for Singapore
13:53 | 26/04/2024 Import-Export
Forum seeks to increase PPP investment effectiveness
13:48 | 25/04/2024 Import-Export
Linking businesses with cooperatives to increase the value chain
09:42 | 25/04/2024 Import-Export
Vietnam has a trade deficit of over US$17 billion with China
15:34 | 24/04/2024 Import-Export
Your care
Export turnover reaches over US$200 billion in the first half of April
15:04 | 28/04/2024 Import-Export
Experts call for efforts in protecting IP rights
15:02 | 28/04/2024 Import-Export
Policies needed to encourage e-commerce to embrace circular economy
15:00 | 28/04/2024 Import-Export
To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits
06:15 | 28/04/2024 Import-Export
Efforts to supply US $ one billion of raw materials and cosmetics to replace imported goods
06:14 | 28/04/2024 Import-Export