Vietnam - Japan Economic Partnership Agreement (VJEPA): Rising to a New Height

The tariffs imposed on Japanese goods will be trimmed down in three periods (from October 1, 2009 to March 31, 2010, from April 1, 2010 to March 31, 2011, and from April 1, 2011 to March 31, 2012), depending on types of goods. As many as 9,706 types of Japanese goods like foods, foodstuffs, medical products, drinks, drugs, cosmetics, chemicals, construction materials, machinery and equipment will be subjected specially preferential import tariffs, which are much lower than the current normal rates.

Vietnamese enterprises also enjoy many preferences when they export their goods to the Japanese market. With lower tax rates, they can immediately raise their exports to this market like agricultural products and seafood.

The most important for Vietnamese enterprises is, however, not to quickly raise export earnings in Japan but to grasp the Japanese market psychology and demand to boost their future production.

The The Japan External Trade Organization (JETRO) said in a meeting in Hanoi that the immediate trading turnover is not only the most important but Vietnamese enterprises should learn more from the Japanese market to create high-grade products for developed countries like Japan. Then, production levels of Vietnamese enterprises will be upgraded and will be based more on market demand.

This opportunity is within reach for Vietnamese enterprises because Japan pledges to assist Vietnam with human resource training in addition to tax cuts. VJEPA is also a chance for Vietnamese enterprises to know more about their competency when they establish relations with partners from countries with modern technologies. The success and failure in the course of competing pressure and cooperative opportunity will force Vietnamese enterprises to review their capacity more practically.

Japanese experts advised Vietnamese enterprises not to focus too much on tax cut results but study the consumer psychology and tastes in Japan to create valued products based on the creativity of Vietnamese people.

This advice is seen as a stimulant for Vietnamese enterprises to explore and promote their creativity instead of exporting materials or manufacturing offshore goods. This is possibly the biggest effect VJEPA creates for Vietnamese enterprises.