Vietnam has not only tackled a deficit but generated a trade surplus with Chile since a free trade agreement between the two countries came into effect on January 1, 2014.
The Vietnam-Chile Free Trade Agreement (VCFTA) has opened the door for Vietnamese products to penetrate Chile and other markets in Latin America.
Under the deal, Chile will remove tariffs on 99.62% of tax lines for 10 years, 83.54% of which (or 81.8% of Vietnam’s total export earnings to Chile) enjoy a zero tax rate as soon as the agreement comes into effect.
Key products benefitting from tax reductions are seafood, coffee, green tea, crude oil, fresh fruit and vegetables, cattle meat, frozen and processed poultry products, garments and footwear.
Meanwhile, 537 tax lines (making up 6.96% of the total tax lines and 4.6% of Vietnam’s exports value to Chile) will be slashed to zero within five years after the agreement is effective.
An additional 704 tax lines (making up 9.12% of the tax lines and 13.6% of the total exports value) will be cut to zero over 10 years. Only 29 products are not subject to tax reductions or exemptions.
Vietnam has pledged to exempt tariffs on 87.8% of tax lines from Chile over 15 years.
(Source VOV)