IN 2022, Vietnam’s plastic exporting companies will continue to benefit from signed FTA, specifically the EVFTA. In addition, the RCEP that came into effect from January 1, 2022, will also help Vietnam’s plastic industry to gain more advantages.
The rules of origin of goods of the RCEP are considered an advantage of Vietnam. Originating goods of Vietnam exported to member countries are considered for preferential tariffs under the RCEP Agreement when a C/O is issued in accordance with the provisions of this Circular. Originating goods imported into Vietnam from member countries shall be considered for preferential tariffs under the RCEP Agreement upon submission of C/O or self-certification of origin of goods issued by the approved exporter.
Vietnam and partner countries will eliminate tariffs on at least 64% of tariff lines as soon as the RCEP Agreement comes into effect. By the end of the tariff elimination roadmap, which is after 20 years, Vietnam will eliminate nearly 90% of tariff lines with partner countries, while partner countries will eliminate about 90-92% of tariff lines for Vietnam and other countries.
ASEAN countries will eliminate almost all tariff lines for Vietnam. In which, imported machinery and equipment, plastic products, and electrical equipment enjoy the largest tariff reduction under RCEP. According to the tariff reduction roadmap, maybe in 2022, plastic products exported to China, Japan, and South Korea will cut tax to 0%. That is both an advantage and a challenge for Vietnamese plastic enterprises when exporting plastic products to these markets.
Currently, more than a third of plastic products produced by Vietnam are exported to China. After RCEP comes into effect, the export potential will be further expanded. At that time, many Chinese investors will build factories and set up warehousing and logistics systems in Vietnam to further promote the development of regional value chains.
According to the General Department of Vietnam Customs statistics, the export turnover of plastic products of Vietnam in January 2022 reached 511.6 million USD, up 3.3% over December 2021 and 36% compared to January 2021.
Vietnam's plastic exports sharply increased in January 2022 was partly because the domestic plastic exporters processed most export orders before entering the Lunar New Year holiday. In addition, plastic products exported to Vietnam's two largest markets, the US and Japan, increased sharply in January 2022. It is expected that in February 2022, Vietnam's export turnover of plastic products will decrease compared to January 2022, due to the national Tet holiday in February.
In January 2022, Vietnam’s plastic products exports achieved high turnover. That has been the month of exporting plastic products with the highest turnover so far. That is a favorable start for Vietnam's plastic industry in 2022.
Plastic exports of Vietnam to big markets in January 2022 saw great fluctuations compared to December 2021 and January 2021. Notably, plastic exports to the two biggest markets – The US and Japan – had higher turnovers than in December 2021 and increased significantly over January 2021. Vietnam’s total plastic export turnover to these markets in January 2022 accounted for 55.5% of the total exports to all markets.
The US continues to be Vietnam’s largest plastic importing market in January, with a turnover of 207.9 million USD, accounting for 40.6% of the total plastic export turnover. Compared to December 2021, plastic export turnover to the US increased by 13.8%, and this number is 67.1% compared to January 2021.
Japan is Vietnam’s second-largest plastic import market, with a January turnover of 76.4 million USD, accounting for 14.9% of Vietnam’s total plastic export turnover. This is a 13.2% and 41.1% increase over December 2021 and January 2021, respectively.
Plastic exports to the Netherlands reached a turnover of 16.6 million USD, equivalent to 3.2% of Vietnam’s plastic export turnover in January. Compared to December 2021, plastic exports to this market increased by 18.5%.
Meanwhile, plastic exports to Korea, Cambodia, and Germany all experienced declines. Export turnover to these markets was 23.8 million USD, 16.6 million USD, and 16.1 million USD, respectively, equivalent to a decrease of 23.4%, 9.6%, and 1.7% over December 2021.
Source: The Ministry of Industry and Trade
Compiled by VietnamCredit