Textile, garment and footwear products made in Vietnam will not enjoy immediate tariff cuts after the EU-Viet Nam Free Trade Agreement (EVFTA) comes into effect. Workers of Duc Giang Garment Co Ltd in Ha Noi cut and sew garments for export to the European market. According to a report from Bao Viet Securities Joint Stock Company (BVSC), after the EVFTA comes into effect, Most Favoured Nation (MFN) tariffs will automatically replace the Generalised System of Preferences (GSP) rates which the EU has applied for developing and underdeveloped countries. This means for the first few years of EVFTA’s implementation, most local garment and footwear products will not benefit from the EVFTA because MFN rates for those products are higher than GSP rates of 9 per cent for garment products and 3-4 per cent for footwear products at present. Specifically, most apparel products that Viet Nam has been exporting to the EU will see export tariffs eliminated gradually from the MFN tariffs of 12 per cent to zero in 3-7 years after the EVFTA comes into effect. Similarly, footwear products will be exempt from MFN tariffs of 12.4 per cent in 3-7 years. Those that will enjoy the immediate tariff cut are… Read full this story
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