In this news alert we will elaborate on recent developments with respect to trade agreements between the EU and Vietnam.
EU – Vietnam
On 17 October 2018 the European Commission adopted the EU-Vietnam trade and investment agreements. Next steps will be the signature and conclusion of these agreements.
The EU-Vietnam trade agreement will ultimately eliminate over 99% of customs duties on goods traded between the two sides. Vietnam will remove 65% of import duties on EU exports as of the moment the agreement will enter into force, with the remainder of duties being gradually eliminated over a 10-year period. EU duties on imports from Vietnam will be eliminated from entering into force of the agreement or progressively over a 7-year period.
To be able to apply reduced import duty rates the products need to be of EU or Vietnamese preferential origin. Products can benefit from preferential tariff treatment of this agreement upon submission of an origin declaration or a EUR.1 certificate. In the future, the EU may move to a system of registered exporters (REX), which could stipulate that the use of an origin declaration or a EUR.1 certificate will be replaced by a statement on a commercial document.
Currently Vietnam has trade preferences with the EU under the Generalised Scheme of Preferences (GSP). Vietnam will be removed from the list of GSP beneficiary countries two years after the date that the EU-Vietnam FTA enters into force. From the moment of entry into force of this FTA, companies can benefit from both agreements for two years (e.g. if the rules of origin under the GSP are less strict than under the EU-Vietnam FTA, however likely the preferential rate under the FTA will be lower than under GSP).
The Commission is now submitting the proposals for signature and conclusion of the agreements to the Council. Once authorised by the Council, the agreements will be signed and presented to the European Parliament for consent. After the European Parliament has given its consent, the trade agreement can be concluded by the Council and enter into force.
We advise companies to assess whether they have flows of goods that can benefit from one of these FTAs. Whether they have goods that qualify so that they can benefit from the reduced or removed import duty rates and whether they fulfill the formal criteria to issue origin declarations, EUR.1 certificates or origin statements.
Since it will take a couple of months before the agreements enter into force there is sufficient time if the goods do not yet comply, to make adjustments to the supply chain or sourcing in order to be able to benefit once the FTA’s will enter into force.
If you have any questions regarding on of these FTAs or require any assistance, please do not hesitate to contact Claudia Buysing Damsté (email@example.com / +31 (0)88 792 3811), Suzanne Bras (firstname.lastname@example.org / +31 (0)88 792 4267) or Stan Vullers (email@example.com/ +31 (0)88 792 1490).