Why Viet Nam matters
CPTPP will provide some improved market access for New Zealand’s goods and services exports to Viet Nam, including through new government procurement opportunities. This will be over and above what we already have under the ASEAN-Australia New Zealand FTA (AANZFTA) with Viet Nam.
Reduced trade barriers
Under AANZFTA, many of Viet Nam’s tariffs on goods trade with New Zealand have already been eliminated or are on their way to being eliminated by 2020. CPTPP will eliminate all outstanding tariffs on New Zealand exports to Viet Nam, notably:
- up to 27% duties on paper and paperboard products by 2021
- up to 18% duties on remaining fish and seafood tariff lines by 2021
- up to 34% duties on sausages and other processed meats by 2027
- up to 15% duties on remaining steel lines by 2028; and
- up to 59% tariffs on wine, beer and spirits by 2029.
You can search the online tariff finder(external link) to find the preferential tariff rate for your particular export or import item.
Under CPTPP, Vietnam has opened its government procurement market for the first time. Its government procurement market is sizable and procures a diverse range of goods and services, which will provide greater opportunities for New Zealand’s established industries as well as more specialised and niche exporters. Vietnam has range of transitional measures that will unlock competitive opportunities and put New Zealand businesses on equal footing to domestic suppliers over time.
Servicing the market
Under CPTPP, New Zealand service suppliers will have improved protection, predictability and transparency when doing business in the Vietnamese market.
For New Zealand, key outcomes from Viet Nam’s CPTPP commitments include:
- improvements to existing market access commitments in certain business and environmental services, including for midwives, nurses, physiotherapists and para-medical personnel; interdisciplinary research and development services providers and nature and landscape protection service suppliers.
- access guaranteed for suppliers of education services in the technical, natural sciences and technology, business administration and business studies, economics, accounting, international law and language training fields.
- confirmation that New Zealand service suppliers can establish legal services, management consultant services, construction and related engineering services and computer services branches in Viet Nam.
- Viet Nam locking in its investment regime relating to recreational, cultural and sporting services and guaranteeing that any future reforms will flow through to New Zealand providers.
Working in Viet Nam
New Zealand business people going to work in Viet Nam will benefit from CPTPP:
- Service sales persons can stay in Viet Nam for up to 6 months. A service sales person is someone who does not receive remuneration from within Viet Nam and is in Viet Nam to negotiate the sale of services. However, the sale of these services cannot be made directly to the public nor can the person be directly engaged in supplying the service to the public entry for dependants of intra-corporate transferees (generally executives, managers and specialists);
- Intra-corporate transferees working in service sectors in which Viet Nam has made WTO commitments, Viet Nam will grant New Zealanders, and their spouses and children, entry for up to three years, with an opportunity to extend the period of stay.
- Contractual services suppliers can enter Vietnam for up to six months or for the duration of the contract, whichever is shorter. Extensions are possible.
Investment partners
AANZFTA did not include schedules of commitments on investment, so those in CPTPP should provide more certainty about the investment environment for New Zealand companies in Viet Nam, while preserving the rights of governments to legislate and regulate in the public interest.
New Zealand and Viet Nam signed a reciprocal side letter that excludes the use of investor-state dispute settlement under CPTPP without government consent.
CPTPP also improves the trade rules that Viet Nam will need to follow, including in relation to labour and environment standards. These improvements will take place over time as Viet Nam has been given transition periods to meet some of the standards in the Agreement.
More information
Minister Parker: Viet Nam Seventh Nation to Ratify CPTPP(external link)