The rate of issuance of certificates of origin (C/O) and the level of utilisation of tariff preferences by Vietnamese enterprises have recorded positive changes after six years of implementing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

 

Statistics from the Agency of Foreign Trade under the Ministry of Industry and Trade show that the export turnover of goods to CPTPP markets issued with a C/O reached only about US$0.7 billion, equivalent to nearly 2 per cent of total turnover, in 2019, the first year the agreement was implemented.

 

This figure increased to about $5 billion last year, accounting for approximately 8.8 per cent.

 

Notably, the utilisation rate of origin preferences has risen sharply in some markets where Việt Nam has an FTA for the first time under the CPTPP framework.

 

For example, in the Mexican market, only about 7 per cent of Việt Nam’s export turnover to this market was issued with a C/O under the CPTPP in 2019, but this rate increased to approximately 47 per cent last year.

 

By product group, the C/O issuance rate for goods exported to Mexico is very high. Specifically, seafood export turnover to this market with an issued C/O accounts for about 70–80 per cent, while the leather and footwear group has a rate of over 80 per cent.

 

Regarding the Canadian market, Trịnh Thị Thu Hiền, deputy director of the Agency of Foreign Trade, said the rate of export turnover with CPTPP C/Os was only about 8 per cent in 2019. However, this figure rose to 17–18 per cent last year.

 

Among these, some product lines have a relatively high origin preference utilisation rate, such as suitcases, bags, hats, umbrellas, sedge mats and rattan and bamboo products, with the turnover rate issued with a CPTPP C/O reaching approximately 42–45 per cent last year.

 

The seafood export group to Canada alone has a rate of about 80 per cent.

 

Hiền also pointed out that these figures indicate a positive growth trend in the utilisation of CPTPP origin preferences, especially in markets that offered tariff preferences for Vietnamese goods for the first time.

 

This result reflects the efforts of the exporting business community in gradually understanding and meeting the agreement’s rules of origin to enhance the competitiveness of Vietnamese goods in CPTPP markets, she said.

 

At the same time, it is also the result of communication and dissemination activities on FTAs in general and the CPTPP in particular carried out by the Ministry of Industry and Trade and other ministries and agencies in recent years, she added.

 

Trailing other FTAs

 

Despite the growth, when compared with other new-generation FTAs such as the Việt Nam–EU Free Trade Agreement (EVFTA) or the Việt Nam–UK Free Trade Agreement (UKVFTA), the CPTPP origin preference utilisation rate remains lower.

 

Analysing the reasons for this difference, Hiền said that for markets such as the EU or the UK, each market is associated with only a single FTA with Việt Nam.

 

Therefore, if enterprises do not use preferences from the EVFTA or UKVFTA, there is almost no other tariff preference mechanism to substitute, she said.

 

Conversely, within the CPTPP framework, many member countries simultaneously participate in various other FTAs alongside Việt Nam.

 

This allows enterprises to choose from multiple sets of rules of origin and parallel tariff preference mechanisms, resulting in the utilisation rate of the CPTPP C/O form being shared with other agreements, she said.

 

For example, regarding the Australian market, Việt Nam and Australia are both members of the CPTPP, the ASEAN–Australia–New Zealand Agreement and the Regional Comprehensive Economic Partnership (RCEP), Hiền explained.

 

Thus, goods exported to Australia can benefit from tariff preferences under three different frameworks, corresponding to three different sets of rules of origin, she said.

 

Similarly, in the Japanese market, Việt Nam and Japan are currently participating in four FTAs: CPTPP, the ASEAN–Japan Agreement, the Việt Nam–Japan Agreement and RCEP. Therefore, goods exported to Japan can enjoy tariff preferences under multiple mechanisms, she added.

 

In practice, if only the CPTPP C/O form rate is considered for goods exported to Japan, the figure is only around 3–5 per cent, Hiền said.

 

However, this does not mean that only that proportion of goods benefits from tariff preferences, she noted.

 

Currently, the rate of preferential C/O issuance under the ASEAN–Japan Agreement for Việt Nam’s exports to Japan is about 25 per cent, under the Việt Nam–Japan Agreement about 20 per cent and under RCEP nearly 5 per cent. When these forms of preferences are aggregated, the total turnover rate of goods exported to Japan benefiting from tariff preferences reaches about 50 per cent.

 

The specific figures and evidence presented above clarify the reasons for differences in CPTPP preferential C/O issuance and utilisation rates in certain markets, as well as the disparity compared with other FTAs such as the UKVFTA or EVFTA. — VNS

 

 

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