The ASEAN – China Free Trade Agreement (ACFTA)
The ASEAN – China Free Trade Agreement (ACFTA)
The Viet Nam ‘s commitment of tariff cut under ACFTA was identified in the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and China signed by ASEAN Summit Leaders and China on 4/11/2002 in Cambodia (hereby called the Framework Agreement), ASEAN – China Trade in Goods Agreement signed on 29/11/2004 in Laos, Memorandum between Viet Nam – China signed on 18/07/2005 in China (MOU). The Agreement came into effect from 01/01/2006.
(i) Viet Nam ‘s commitment of tariff cut under ACFTA
- Viet Nam commits to eliminate tariff of 90% tariff lines in 10 years, with some flexible till 2018. For the remaining tariff lines, Viet Nam commits to cut to the range of 5% to 50% by 2020. To fulfil Viet Nam’s commitment, MOF promulgated Circular166/2014/TT-BTC dated 14/11/2014 on the List of Special Preferential Import Tax to implement ACFTA for the period of 2015-2018, being effective from 01/01/2015.
- From 01/01/2015, Viet Nam further cut 3691 tariff lines to 0% in comparison with the number of 2014 (increasing the total number of tariff lines of 0% rate to 7.983, accounting for 84.11% of the total number in the list), focusing on the number of item group including: plastics & plastic materials, furniture and wood products, machinery, parts and components, computer products and electronic components, fabrics, textile materials,leather, textiles, and some of iron and steel products. The tariff rates in 2016, 2017 remain unchanged compared to 2015.
- By 01/01/2018, 588 more tariff lines are to be cut to zero, increasing the number of tariff lines cut to 0% to 8.571, making up 90.3% of the list, including some of meat processing, vegetable processing, cereal, electric automotive, home appliances, chemicals, automobile’s square parts, construction materials, plastic, rubber, paper ...
- By 2020, about 475 sensitive tariff lines are to be cut to 5%, including iron and steel products, electric cables, electric appliances, rubber products, ceramic, paper, cement, plastic and other industrial products; processed agricultural products; some types of trucks and specialized vehicles...
- There are 456 lines remaining high tariff rate or being excluded from the commitment to tariff cut, including: poultry eggs, suger, tobacco, engines, vehicles (automotive, motorbike; except trucks of g.v.w from 6-10 tons), petrol, iron, steel, construction materials, some commodities relating to national security and defense.
(ii) China’s commitment of tariff cut under ACFTA
- China commits to cut tariff rate for 95% tariff lines in 2011. For the remaining sensitive tariff lines, China commits to cut to a range of 5% to 50% by 2018.
- In 2015, China has 7.846 tariff lines cut to 0%, making up 95.35% of the total tariff lines and accounting for 91.59% of total import turnover from Viet Nam. The average tariff of China for ASEAN in the period of 2015-2017 was 0.73%/year and 0.56%/year by 2018.
- China remains the tariff for some items including cereal and cereal products; coffee, tea, spices; petrol; fertilizer; plastic; garment fabric, textile material; leather; engines; equipments and machinery; automotive; motor and parts of automotive; furniture...