Understanding rules of origin necessary to benefit from FTAs
Vietnamese enterprises should understand and meticulously apply the stringent rules of origin, as well as the exceptions of free trade agreements, to enjoy the best from preferential taxation, as free trade does not mean “free” absolutely.
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The recommendation was made by Nestor Scherbey, senior adviser for the Vietnam Trade Facilitation Alliance (VTFA), at a workshop on coordination in action to facilitate trade in Ho Chi Minh City on April 6.
The Trans-Pacific Partnership (TPP) and the EU-Vietnam Free Trade Agreement (EVFTA) are considered the most complicated ever free trade agreements, requiring Vietnamese Government offices and businesses to invest time and increase their knowledge to take full advantage of these FTAs.
Herb Cochran, Executive Director of the American Chamber of Commerce (AmCham) in Vietnam, said that rules of origin within FTAs open up a new investment opportunity for multinational companies as well as their suppliers in Vietnam.
These companies will invest more in producing materials and intermediate goods to meet specific requirements in end-products at TPP markets and in Europe, he added.
As such, experts at the workshop emphasised the need for provincial authorities in Vietnam to establish a trade information database of FDI businesses and domestic suppliers, to help Vietnamese enterprises become FDI businesses’ suppliers.
They also asked for more export market surveys conducted by trade information centres to clarify foreign markets’ technical requirements for businesses, especially small and medium-sized ones.
