A slew of products traded between Vietnam and Peru will be subject to zero tariffs as Peru officially ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
|Peru’s ratification of the CPTPP is expected to stimulate bilateral trade with Vietnam |
The Peruvian National Assembly officially voted to ratify the CPTP after more than three years since the agreement was signed in March 2018. Thus, Peru has become the eighth member country to ratify the deal.
The agreement will officially enter into force for Peru 60 days after the country completes the registration of the ratification with New Zealand, the depository for the CPTPP from July 14, 2021.
Accordingly, Peru commits to eliminate 81 per cent of tariff lines as soon as the agreement comes into effect, equivalent to 62 per cent of import turnover from Vietnam. Peru will eliminate 99.4 per cent of tariff lines in the 17th year after the deal takes effect.
According to the MoIT, Peru's official ratification of the CPTPP lays the foundation to promote bilateral trade turnover between Vietnam and Peru, paving the way for Vietnamese goods to Peru in the coming time.
Specifically, Vietnam's key exports such as outdoor furniture and agricultural products will enjoy a zero-tariff access as soon as the agreement comes into force.
Particularly for textiles and garments, the tax rate will be reduced zero per cent in the 16th year since the deal comes into effect. Meanwhile, Peru imports about $350 million of footwear each year, which present tremendous opportunities for Vietnam's footwear exports.
With the CPTPP, footwear products originating from Vietnam, which are already known in Peru, will gain an additional competitive advantage over Chinese and Brazilian products. There are also other potential products to export to Peru such as seafood, consumer goods, rubber, electronics devices, and construction materials.
Pre-pandemic, the bilateral trade turnover between the two countries increased by 48.3 per cent within five years, from $284.96 million in 2014 to $422.73 million in 2019. In 2020, due to the impact of the pandemic, the bilateral trade turnover decreased by 7.5 per cent, reaching $391.17 million.
In the first six months of 2021, the turnover between Vietnam and Peru reached $278.27 million, an increase of 78.7 per cent over the same period. Among them, Vietnam's exports to Peru reached $242.49 million, up 103.6 per cent against last year.