Recently signed and pending implementation by individual member states, the TPP is one of the most anticipated trade developments in recent years.
For Vietnam’s exporters, the agreement is a watershed moment which will see over 18,000 total tariff reductions extending to key industries such as garments, machinery, and electronics.
Understanding TPP’s Tariff Reductions
To leverage TPP tariff reductions, it is important to consider the various methods by which individual tariffs are reduced in member states party to the agreement.
It should be immediately noted that, unlike some multilateral trade agreements, tariff reductions have been negotiated in a bilateral manner within the TPP package – resulting in specific and individual commitments by each state to every other state within the TPP. For example, the reduction of a Canadian tariff against a good from Australia does not guarantee Canadian reductions for Vietnamese Producers of similar goods.
While individual commitments may vary, the rage of options available to most countries are constrained and enjoy a level of uniformity throughout TPP. To illustrate this, the remaining paragraphs will explore the Tariff Reduction Schedule that the US has agreed to with regards to Vietnam.
Excerpt from Vietnam Briefing’s November edition, entitled “Navigating the Vietnam Supply Chain“, which provides valuable insight into the emergence of Vietnam as a destination for China plus on manufacturing.
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ASEAN Briefing features business news, regulatory updates and extensive data on ASEAN free trade, double tax agreements and foreign direct investment laws in the region. Covering all ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)