- EU-Vietnam free trade agreement will gradually eliminate almost all customs duties
- The deal includes binding rules on climate, labor and human rights
If you are doing business with south east Asia, you surely heard about the ratification of the “most modern and ambitious agreement ever concluded between the EU and a developing country”on 12th February by the European parliament. The deal includes several aspects as eliminate 99% of customs duties within the next 10 years, as well as binding rules on climates, labor and human rights in Vietnam. Vietnam mainly exports telecommunications equipment, clothing and food products to the EU, while EU mainly exports goods such as machinery, chemicals and agricultural products to Vietnam. I will focus my article on the reduction or elimination of customs duties for textile exportation to the EU.
Export Duties Schedule of Vietnam
As per the appendix 2-A-3 from the agreement, all products are categorized from A to B10 following the HS code of your product.
For example, “customs duties on originating goods provided for in the items in staging category “A” in a Party’s Schedule shall be eliminated entirely and such goods shall be free of any customs duty from the date of entry into force of this Agreement”.
And “staging category “B10″ in a Party’s Schedule shall be removed in 11 equal annual stages beginning on the date of entry into force of this Agreement, and such goods shall thereafter be free of any customs duty”.
Please find a quick resume of the planned schedule by staging categories:
I will not be able to quote you all HS codes with his staging categories but you can find below some examples:
- A women jacket in wool will be exempt from any customs duty on the date of entry into force of the agreement while a women jacket in synthetic fibers will see his custom duties reduced each year until the total exemption after 6 years.
- A bonnet 100% acrylic will be exempt from any customs duty in 6 years also.
- “Men’s overcoats, car coats, capes, cloaks, anoraks (including ski jackets), windcheaters, wind-jackets and similar articles” are almost all in staging categories “B7”, meaning that you will have to wait 8 years before the total elimination of the customs duties, from 12% to 0%.
As you can see it is impossible to generalize the tariff schedule and you should check directly your HS code in the file. Comment this article if you want to receive by email the full list.
The EU-Vietnam trade agreement is now set to enter into force in 2020, upon conclusion of the ratification procedure by Vietnam.