Viet Nam – Cuba agreed to waive or reduce tariffs for nearly 100% goods imported between these two countries for the next 5 years.
According to the Ministry of Industry and Trade, Viet Nam and Cuba completed all procedures to validate their trade agreement from the first of April. This Agreement was signed in Hanoi on November 9th, 2018 to replace the Agreement on “Commercial exchange and other forms of economic cooperation between Cuba and Vietnam” in 1996.
With 14 chapters, Viet Nam – Cuba trade agreement includes regulations on the trade of goods, rules of origin, custom management, trade facilitation, trade defense, technical standards and specifications, adequacy assessment standards, food sanitation, animal and plant quarantine, and cooperation of economy and trade…
Accordingly, both sides have confirmed to eliminate or reduce tariffs imposed on almost 100% of mutually imported goods in 5 years.
In order to carry out this agreement, on April 3, 2020, Viet Nam government has issued Decree No.39/2020/NĐ-CP promulgating Vietnam’s special preferential import tariff schedule for implementation of the trade agreement between Vietnam and Cuba in 2020-2023 period. This decree will come into force from May 20, 2020.
As declared by the Ministry of Finance, the new special preferential import tariff contains 563 items and applies import duty rates for 4 different periods: from April 1, 2020 to December 31, 2020; from January 1, 2021 to December 31, 2021; from January 1, 2022 to December 31, 2022; from January 1, 2023 to December 31, 2023.
Import tariffs for 514 items (including some types of shrimp, fish, honey, fruits, concrete, chrome ore, disinfectants, protection clothes, wireless device, surgeon lamp…) will be subject to 0% from April 1st. In terms of the remaining 49 items, the import tax rate will be reduced gradually as per schedule pointed out in the Decree. Specifically, commodities groups like sugar (1710) and raw tobacco (2410); cigarettes and cigars (2402); alcohol and liquor (2204) will have their tariff rates cut to 15%, 70% and 20% respectively in 4 years.
The Trade Agreement will establish a more stable and transparent legal environment, which will be of great assistance to promote commercial relations and bilateral investment, bringing huge merits to enterprises from both countries.
Additionally, this agreement is expected to not only facilitate import-export transactions but also increase trade turnover – a driving force to deepen the economic ties between Vietnam and Cuba.
Vietnam is currently the second-largest trading partner of Cuba in Asia. The cooperation relationship in the economy, commerce and investment of the two nations has continuously developed with trade turnover recorded for 2018 being 335.8 million USD, a 25%-rise compared to 2017.
The structure of export – import fields of Vietnam and Cuba can be a good supplement for each other. While Cuba has a great demand for garments, shoes and electronic products, Vietnam desire to enhance cooperation with Cuba in pharmaceuticals, medicine, construction and education.
The leaders of two countries have pledged to maintain sustainable trading improvement to reach a trade turnover rate of 500 million USD in 2022./
Translated & Edited by: Dandelion & Daniel