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AGREEMENT BETWEEN JAPAN AND THE SOCIALIST REPUBLIC OF VIET NAM FOR AN ECONOMIC PARTNERSHIP (VJEPA)

The Vietnam-Japan Economic Partnership Agreement (VJEPA) was signed on December 25, 2008, has been effective since October 1, 2009. Its comprehensive content includes many areas including trade in goods, trade in services, investment, and improvement of the business environment and movement of natural persons.

Accordingly, in the last year of the tax reduction roadmap (in 2026), which is after 16 year implementation of this Agreement, Vietnam has committed to eliminating 90.64% of the tariff lines and by the time the Agreement was effective, 29.14% of the tariff lines have been immediately deleted. The remaining ones are for CKD cars and other sensitive lines, which maintain the basic tariffs or do not reduce, accounting for 9% on the groups including alcohol tobacco, some chemical products, explosives, rubber, cotton and steel…

Japan committed to eliminate tariffs for 96.45% of the total tariff lines for Vietnamese goods by the end of the schedule (in 2026), in which:

  • For agricultural products: Eliminate tariffs on 36% of tax lines for agricultural product as soon as VJEPA comes into effect (in 2009); continue to gradually eliminate agricultural tax lines according to the specific schedule (by 2019 as latest) except for the excluded group (group X) (including 735/2350 tariff lines for agricultural products that Japan strictly controls by tariff quotas and quantity requirement measures), and the Post Negotiating Group (group C2) (a group of Japanese products undergoing structural reform)
  • For seafood: Commitment to cut the tariff immediately (in 2009) for 19% of fishery tax lines, after 15 years, it will reduce a total of 57% of tariff line for fishery (188/330 lines); 33% of tariff line to fishery (59/330 lines) apply import quotas.
  • For industrial goods: Eliminate immediately with 95% of the tariff lines on industrial products, and after 10 years, 97% of the tariff lines; about 57 tax lines for industrial product still apply import quotas (mainly in textiles, leather); 58 tax lines with no commitments to cut (leather clothing, footwear).

Vietnam commits to eliminate tariffs for Japanese goods according to the following schedule:

  • From 2018, 41.78% of tariff lines in the Tariff will be eliminated.
  • By 2026 (the last year of the tax reduction schedule), eliminate 90.64% of the tax lines.

A good is considered to be originating in VJEPA if it is wholly obtained or produced in a Member country, or if it meets one of the following two conditions:

    • Goods meeting the general origin criteria:
      • Regional Value Content (RVC): minimum 40%, or
      • Change tariff classification (CTC): at the level of 4-digits (CTH – non-originating materials must belong to a different HS Group from the HS Group of the finished product).
    • Goods with specific rules of origin: some goods do not apply the general rules, but the specific rules of origin that apply to the good are identified in the  Product- Specific Rules.

VJEPA Certificate of Origin is C/O form VJ. All these C/O are currently being issued in hard copy. C/O VJ can be issued before, during or after the export of the goods. VJEPA does not have a provision on Self-Certification of Origin.

VJEPA has a number of new commitments compared to the WTO regarding definitions and levels of competitive protection in some service sectors (such as telecommunications services...).

Regarding service market openness:

  • The level of commitment to openness that Vietnam offers in the VJEPA is almost similar to that of Vietnam in the WTO,
  • Japan opens the service market to Vietnam much wider than its commitments in the WTO (especially professional services such as legal services, tax consulting, computer services, engineering, advertising, analysis, auditing, services in information, construction, distribution, education, environment, finance, healthcare, tourism).

VJEPA has an additional commitment to open its doors and receive business guests, specifically, to accept nurses if it meets all the conditions required by the law of the receiving country for a period of 3 years and can be extended.

In addition, Japan also commits to give Vietnam preferential ODA to train 200-300 Vietnamese nurses in Japan every year and allows these nurses trained in Japan to work long-term (up to 7 years) in Japan.