Directive No. 01/1999/CT-TTg on the implementation of the schedule for reducing import tariffs of Vietnam under the Agreement on the Framework for the Integration of Preferential Tariff Treatment - CEPT

DIRECTIVE

Regarding the implementation of the schedule for reducing import tariffs of Vietnam under the Agreement on the Common Effective Preferential Tariff Scheme for Trade among Developing Countries (CEPT)

Immediately upon becoming a full member of the Association of Southeast Asian Nations (ASEAN) in July 1995, the Government of Vietnam joined the Agreement on the Common Effective Preferential Tariff Scheme (CEPT), committing to gradually reduce import tariff rates for ASEAN goods. The reduction of import tariffs according to the commitments began in 1996 and must be completed by 2006; gradually eliminate non-tariff protective measures; strengthen cooperation in Customs to facilitate the exchange of goods, trade, and investment among member countries, forming the ASEAN Free Trade Area (AFTA).

The Government has approved the schedule for reducing import tariff rates of Vietnam with ASEAN for a ten-year period (1996-2006) and has issued the list of goods implementing CEPT up to the end of 1998. However, after nearly three years of implementing the tariff reduction under CEPT, ministries, sectors, and localities throughout the country, especially enterprises, have not fully recognized the difficulties and challenges, the intense competition of opening the market for regional economic integration, and have not made necessary adjustments to implement the schedule for reducing import tariffs with ASEAN but continue to invest and produce according to the old structure; and many enterprises still request protection as before.

In order to enhance the effectiveness and competitiveness of the economy, proactively penetrate and dominate the market under conditions where we are gradually reducing import tariff rates for ASEAN goods, the Prime Minister instructs:

1. Ministries, sectors, and localities nationwide need to organize the implementation and dissemination of the State's policy on the schedule for reducing import tariffs to enterprises; promptly announce the list of items to be included in the CEPT tariff reduction each year so that each enterprise can set specific goals; and clearly identify that the implementation of reducing import tariffs with ASEAN is the obligation of a member country, but also an opportunity for us to penetrate and expand the market, integrate into the regional and international economy.

2. When ministries, sectors, and localities develop, review, or submit for approval investment projects (both domestic and foreign investments); enterprises when considering, deciding on the scale of investment, production and business plans, in addition to carefully calculating economic and technical factors, they also need to base their assessment of project feasibility on the schedule for reducing import tariffs for ASEAN goods, particularly paying attention to product consumption capacity and competitive ability compared to similar products from ASEAN according to the tariff reduction schedule for those goods.

3. Enterprises need to clearly understand and master the schedule for reducing import tariffs; the annual list of goods implementing CEPT, actively approach both the domestic market and the ASEAN market, calculate and decide on changes in production scale, investment structure; innovate technology, change models; diversify types of business and services; strive to dominate the domestic market gradually expanding to the ASEAN market and the world.

4. Based on the schedule for reducing import tariffs and the list of goods implementing CEPT issued by the Government, ministries managing state affairs in economic and technical sectors, the Vietnam Chamber of Commerce and Industry, the Central Council of the Vietnam Federation of Labor Cooperatives; People's Committees of provinces and centrally-administered cities, local industry and commerce associations guide and provide information on industries and products with competitive advantages; shift production and business directions if it is deemed that the reduction of import tariffs will have adverse effects on the products or industries of their own enterprises or localities.

5. The Ministry of Trade shall take the lead in coordinating with relevant ministries and sectors to urgently build and perfect a comprehensive integration strategy proposal, including the schedule for reducing non-tariff measures under the CEPT Agreement.

6. The Ministry of Planning and Investment shall take the lead in coordinating with the Ministry of Trade, the Ministry of Finance, and the Vietnam Chamber of Commerce and Industry to develop specific, regular dialogue plans with enterprises; closely monitor feedback information and report results quarterly to the Prime Minister./.