First of all, many Vietnamese enterprises do not fully comprehend the rules of origin. In addition, a number of committed rules of origin are interpreted in a way that makes it difficult for enterprises to comply and take advantage of them. This is why the proportion of export turnover using preferential tariffs under FTAs in total export turnover is currently low and has been trending downward in recent years (from 39 percent in 2018 to 33 percent in 2020).
Besides, Vietnamese enterprises are not aware of integration knowledge as well as necessary self-defense measures when participating in FTAs. The percentage of Vietnamese enterprises which can take advantages from FTA is less than 50%. And Vietnam's exports had been the subject of 208 foreign trade remedy investigation cases by the end of August 2021.
Majority of Vietnamese businesses are small, medium, and even super small (average registered capital of 6 billion VND per company). However, their products are primarily processed goods that do not add significant economic value.
Moreover, Circulars on Rules of Origin under FTAs contain difficult-to-understand language that must always be explained by a Ministry of Industry and Trade official (the only entity in Vietnam with enough expertise to interpret it correctly and effectively force).
Especially, Vietnamese garment enterprises are facing many challenges from the rules of origin. In some FTAs such as AFTA, FTA with China, Korea and Chile, the local content requirements are not stringent (raw materials can be imported and only the final stages of cutting and sewing the fabric take place in Vietnam), but for the FTAs such as ASEAN – Australia/New Zealand, ASEAN – India, the local content requirements are much more stringent (final products are required to have a minimum localisation rate of around 35–40%).
First of all
,
many
Vietnamese
enterprises
do not
fully
comprehend the
rules
of
origin
.
In addition
, a number of committed
rules
of
origin
are interpreted
in a way that
makes
it difficult for
enterprises
to comply and take advantage of them. This is why the proportion of export turnover using preferential tariffs under
FTAs
in total export turnover is
currently
low and has been trending downward in recent years (from 39 percent in 2018 to 33 percent in 2020).
Besides
, Vietnamese
enterprises
are not aware of integration knowledge
as well
as necessary self-defense measures when participating in
FTAs
. The percentage of Vietnamese
enterprises
which can take advantages from FTA is less than 50%. And Vietnam's exports had been the subject of 208 foreign trade remedy investigation cases by the
end
of August 2021.
Majority of Vietnamese businesses are
small
, medium, and even super
small
(average registered capital of 6 billion VND per
company
).
However
, their products are
primarily
processed
goods
that do not
add
significant economic value.
Moreover
, Circulars on
Rules
of
Origin
under
FTAs
contain difficult-to-understand language that
must
always be
explained
by a Ministry of Industry and Trade official (the
only
entity in Vietnam with
enough
expertise to interpret it
correctly
and
effectively
force).
Especially
, Vietnamese garment
enterprises
are facing
many
challenges from the
rules
of
origin
. In
some
FTAs
such as
AFTA
, FTA with China, Korea and Chile, the local content requirements are not stringent (raw materials can
be imported
and
only
the final stages of cutting and sewing the fabric take place in Vietnam),
but
for the
FTAs
such as ASEAN
–
Australia/New Zealand, ASEAN
–
India, the local content requirements are much more stringent (final products
are required
to have a minimum
localisation
rate of around 35–40%).