2.

1 The Implementation of the Comprehensive and Progressive Agreement for

Trans-Pacific Partnership (CPTPP) in Vietnam
2.1.1 Overview
Members of the CPTPP agreed to uphold TPP obligations on goods market access.
As a result, all CPTPP countries have agreed to abolish import tariffs on nearly all
tariff lines.

Import duty reduction and elimination commitments under the CPTPP are divided
into three main categories:
(1) Immediate elimination: Import duties shall be abolished immediately while the
Agreement enters into force.
(2) Elimination after a period of time: Import duties will be removed after a set
period of time. The majority of tariffs in the CPTPP will be repealed after 3–7
years; but, in some situations, the length of time may be extended to 10 years. A
few tariff lines will be removed after more than 20 years in a few specific
instances.
(3) Tariff quotas: import tariffs on certain tariff lines will be decreased or
eliminated if a certain volume of imports is reached. Import charges will be
increased or special tariffs will not apply to goods in excess of that amount.

Most CPTPP countries apply the same preferential import tariffs to other CPTPP
partners while other countries impose distinct tariff schedules for each CPTPP
members (including Canada, Chile, Japan, Mexico).

CPTPP countries will reduce import duty lines ranging from 97 percent to 100
percent for commodities originating in Vietnam. When the CPTPP enters into force,
the majority of Vietnamese commodities imported into CPTPP members will be
subject to zero percent import taxes.

2.1.2 Commitments on import duties from Japan for Viet Nam

The preferential import duty commitments of Japan for Vietnam are as follows:
Japan commits to eliminate import duties for 86% of tariff lines, which is equivalent
to 93.6% of exports from Viet Nam to Japan when the Agreement enters into force,
and import duties of 90% tariff lines will be 0% after 5 years. In this Agreement, for
the first time, Japan commits to eliminate import duties for most of agricultural and
seafood products of Viet Nam.

More specific, Fishery products will receive 0% tariff rates exporting to Canada and
Japan once the Agreement enters into force. Many tariff lines that are out of scope
in Viet Nam – Japan Economic Partnership Agreement and ASEAN-Japan
Comprehensive Economic Partnership Agreement will receive 0% rate in CPTPP.
For example: cod, surimi, shrimp, crab… will be eliminated after 3 years.

2.2 The effects of CPTPP on Vietnam’s Exports to Japan

Vietnamese seafood exports have expanded dramatically as a result of rising global
demand for food, particularly seafood. According to the United Nations Statistics
Division, Vietnam is the world's third largest exporter of fish, behind China and
Norway (UNSD, 2019).

Trade flows tend to shift from countries with low tariff reductions to countries with
bigger reductions after the CPTPP takes effect. For CPTPP countries, Vietnam had the
highest tax rate of 35 percent, followed by Mexico (20%) and Japan (15%).  As a
result, the three nations with the largest increases in fisheries import turnover are
Japan, Vietnam, and Mexico, with increases of 71.29 million USD, 43.46 million
USD, and 17.86 million USD, respectively. 

Exports of seafood have decreased 9 billion dollars in value from 8.8 billion dollars in
2018 to approximately 8.6 billion dollars in 2019. (VASEP, 2010). The value of
seafood production in 2019 increased by 6.25% compared to 2018. The total output of
all kinds reached about 8.15 million tons, up 4.9% over the previous year.
In the group of key products, only tuna maintained a positive growth of nearly 12%,
other items all decreased: shrimp decreased by nearly 5%, pangasius decreased by
nearly 12%, squid and octopus decreased by 13%. In addition, the export of products
from other types of fish also increased by 15%, helping to limit the decrease in
turnover due to shrimp, pangasius and squid and octopus.

The European Union, the United States (US), Japan, and China are the key markets for
Vietnamese seafood. Vietnam benefited from the CPTPP in terms of manufactured
exports, mainly to Japan.

In 2018, Japan is the second-largest importer of fishery products from Vietnam in the
world with 15.2 percent of Vietnam’s total export turnover, only after the United
States. In 2019, The US, China and Japan each account for 17 percent of the total
export market.
In the first 4 months of 2019, according to the General Department of Vietnam
Customs, Japan has become the largest seafood importer of Vietnam. The entire value
of Vietnamese seafood sent to Japan in the first four months of 2019 was US$ 411
million, up 9.7% over the same period of 2018. This is even more significant when it
may somewhat compensate for the downturn of other important markets, such as the
US, which fell by roughly 2% compared to the same period last year, the EU, which
fell by 9.6%, and China, which fell by 8.6%.
The above chart shows Vietnam's fisheries exports to CPTPP member countries by
sub-sector. Two major export commodities – pangasius and shrimp – together
represent approximately 60 percent of Vietnam’s total export value.
According to the Vietnam Association of Seafood Exporters and Producers (VASEP),
Vietnam's Pangasius exports to Japan totaled $8.58 million in the first three months of
2019, rising 60.37 percent from the same period last year. This export value is also
larger than the value of exports to highly valued and potential markets such as the
United Arab Emirates, Egypt, Germany, or Belgium...

Many seafood items that have not yet committed to removing levies in FTAs will be
tax-free when exported to Japan under the CPTPP. Some fish items, in particular, will
benefit from a 0% tax rate as soon as the deal takes effect, including pangasius
products, which would be free from the existing 3.5-10.5 percent levy.

From April 2019, pangasius fish products – HS code 030432 imported into Japan from
Thailand, Mexico, Chile and the Philippines were exempted from import duties. Those
from ASEAN were applied a 3.5% tax rate, and tax-exempt if they are from CPTPP
members. Therefore, the main export frozen pangasius product of Vietnam (code HS
030462) was completely exempt from tax when imported into the Japanese market.

The overall value of pangasius exports to Japan reached approximately US $ 25

million by the end of September 2019, up 2.6 percent from the same period last year.
Exports of pangasius to this market increased by 2% in September 2019, to US $ 3
million.