Australia will cut 90 percent of import tariff lines in 2018 and 100 percent of them in 2020 under the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) roadmap, said the Ministry of Industry and Trade (MoIT).
Pham Tuan Anh, deputy head of the Ministry of Finance’s Department of International Cooperation, said this was a good opportunity for Vietnamese businesses to promote the export of goods to the Australian market when those import tariff lines reduce to zero percent.
Vietnam has had many advantages in exporting agricultural products, consumer goods, textiles, footwear and wood products to Australia. These groups are eligible for many tariff preferences under AANZFTA.
Australia is now the eighth largest exporter to Vietnam, while Vietnam is the 14th largest exporter to Australia, according to the MoIT.
Australia is a potential export market for Vietnamese goods, especially seafood as its consumption in that country has increased rapidly to some one million tonne per year.
The domestic output of seafood has reached 220,000 tonnes, so Australia needs to import more than 700,000 tonnes of seafood every year. Meanwhile, Vietnam is the third largest exporter of seafood in the world, after China and Thailand.
Moreover, Australian consumers like Vietnamese seafood due to its reasonable pricing and the good taste of Vietnamese freshwater fish.
Vietnam’s cashew is also a promising commodity for Australian consumers. Vietnam is the largest exporter of cashew nuts to Australia, accounting for some 74 percent of cashew exports to the nation.
Some items such as wood and wood products, bags, suitcases, textiles, machinery and equipment are also considered potential commodities in the Australian market.
According to the MoIT, Vietnamese goods have appeared in a small volume in supermarkets in Australia, reflecting the great potential of the Vietnamese export goods as well as Australia’s high import demand.
However, it is difficult for the Vietnamese goods to join Australia’s retail distribution system directly, the MoIT said, because at present, Vietnamese enterprises do not have professional knowledge of the retail system, including measures on approaching the system as well as regulations on food hygiene and safety and technical standards. They have forgotten how to introduce and advertise Vietnamese products in supermarkets.
To provide the necessary information about the Australian distribution system to Vietnamese companies, the Vietnam Trade Office in Australia has introduced to local businesses the list of large retail groups in Australia with an annual revenue of 1 billion AUD (782 million USD) and their basic activities to help them market their products directly to the Australian distribution chain.
The retailers include Coles, Woolworths, Aldi, Woolworths Limited, Wesfarmers Limited, Harvey Norman Holdings Ltd, Metcash Limited and IGA. Currently, Vietnam’s food stalls are present at the Coles supermarket chain, paving the way for more Vietnamese goods to reach Australian consumers.
According to the MoIT, after more than six years of implementation of AANZFTA, the trade value between Vietnam and Australia is increasing by an average of 5 percent every year.
The General Department of Customs said in 2017, the bilateral trade value between Vietnam and Australia reached more than 6.46 billion USD, a year-on-year growth of 22.9 percent.
Vietnam’s exports to Australia reached 3.23 billion USD, up 12.5 percent over 2016, while its import value from Australia stood at over 3.17 billion USD, up 29.7 percent against 2016. Vietnam gained a trade surplus of 480 million USD with Australia.
The bilateral trade value between the two countries in 2016 rose 6.5 percent year-on-year.