National STTA Trade and Tariff Expert

USAID Trade Facilitation Program

SCOPE OF WORK

Improve businesses' awareness of Vietnam's Free Trade Agreement tariff policies and promote greater utilization of preferential Certificates of Origin

Proposed Personnel:             National STTA Trade and Tariff Expert

Period of Performance:         o/a March 15 – September 30, 2021

Origin/Destination:               Hanoi, Vietnam

Travel Dates:                         n/a

Activity No.                            FY 2021 Activity 4.7 - Disseminate the tariff commitments in FTAs Sub-activity 4.7.1 – Study and produce handbook on Vietnam’s roadmap for tariff reductions and implementation of FTAs

MEL indicator(s):                   P-1, IR4.1-1 and IR4.1.-2

Project Background:

The USAID Vietnam Trade Facilitation Program is a five-year project that aims to support the adoption and implementation of a more risk-based approach to customs and specialized inspection institutions in Vietnam. The program will work with the General Department of Vietnam Customs (GDVC) to strengthen the National Trade Facilitation Committee (NTFC) of Vietnam and its Working Groups; streamline border clearance procedures (including specialized inspection implemented by other line ministries and agencies); harmonize the implementation of risk-based approaches between the national and provincial levels; train national and provincial customs officers and staff from other ministries on risk management; and facilitate dialogue between customs and business and between stakeholders in Hanoi and in the provinces.

Activity Background:

Objective: The overall objective of this Activity is to: 

• Improve transparency and increase businesses' awareness of Vietnam's import tariff policies for international economic integration and to encourage businesses to acquire necessary skills to navigate tariff commitments and to use preferential Certificates of Origin (C/O) accordingly so as to benefit from the Free Trade Agreements (FTAs) entered into by Vietnam; and
• Improve the predictability and visibility of FTA tariff commitments by visualizing tariff commitments on the financial sectors and thus improve proactivity of the Ministry of Finance (MOF) in proposing future tariff commitments.

Context: Vetnam has become one of the most open economies in the world with a trade-to-GDP ratio of 187.52 percent in 2018, rising to 202.73 percent in 2019. Merchandise export growth averaged more than 15 percent per annum in the last ten years; nearly five times the global export growth rate in the same period.

As the trend for FTAs continues to increase, Vietnam has entered into 15 (fifteen) different agreements with major trade partners. As a member of the Association of South East Asian Nations (ASEAN) and subsequently the ASEAN Free Trade Area (AFTA), Vietnam has signed trade agreements or pacts with China, the Republic of Korea, Australia and New Zealand, India, Chile and Japan. Vietnam ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in November 2018 and the trade agreement entered into force on December 30, 2018. The European Union and Vietnam signed a Free Trade Agreement and an Investment Protection Agreement (EVFTA) on June 30, 2019 and this too entered into force in 2020. Vietnam entered into the Regional Comprehensive Economic Partnership (RCEP) on November 15, 2020 and concluded the UK-VFTA on December 29, 2020.

Under these FTAs, Vietnam and other member countries have cut, or are cutting, down the tariff rates for the majority of products (e.g. up to 99% of Vietnam exports to EU) so as to facilitate trade flows. The Rules of Origin (ROO) play a key role in differentiating between originating goods that are eligible for preferential tariff and non-originating goods subject to much higher import tariffs.

In tandem with the proliferation of FTAs, the Government has issued 12 (twelve) Decrees on preferential tariffs and currently, the MOF has been leading the process to draft the forthcoming Decree on preferential tariffs under the EVFTA. The complex web of FTAs has led to many discrepancies in the liberalization rate (i.e. number of tariff lines under commitments), the average tariff rates, the dispersion of tariff schedules, and the associated requirements for ROOs and C/Os as the condition for the preferential tariff rates. Due to the complexity of various levels of tariff commitment, it is difficult for businesses to fully utilize the preferential tariff rates. According to the statistics by the Ministry of Industry and Trade (MOIT), in 2019, the trade value utilizing preferential tariffs accounted for 47.55 billion USD or only 37.2% of the total trade value with the relevant FTA markets. The rate of preferential C/O utilization has remained stable at 37.2% in 2018 and 39% in 2017. In 2019, there were more than 1 million preferential C/O issued under FTAs and the Generalised Scheme of Preferences (GSP), with the trade value of 61.19 billion USD having increased by 14% of value, and 10% in number of C/O, compared with 2018. Footwear has the highest rate of preferential C/O utilization followed by plastic products, garments, aqua-products, rubber, coffee and pepper.

To overcome the issues of complexity in tariff commitments, a lack of communication and under-utilization of FTA preferential C/O; the Program will support MOF to firstly undertake the sub-activity to improve businesses' awareness of Vietnam's import tariff policies in international economic integration and to encourage businesses to acquire the necessary skills to navigate the system of tariff commitments and to use preferential C/O accordingly, so as to benefit from the FTAs.

The MOF has completed the roadmap of tariff reduction for 2022–2027 under the respective FTAs and it is necessary to increase awareness and understanding about the roadmap among the private sector businesses. The support and assistance to be provided will include: raising public awareness on the roadmap for reducing tariffs in new and effective FTAs; review and study of the problems encountered in the implementation of the FTA commitments including customs-related commitments; and development of a handbook on the tariff reduction roadmap and FTA implementation guidelines for specific sectors.

The Program will take the opportunity of the communication/dissemination workshops to begin consultations and the survey-based study of the problems encountered in the implementation of the FTA commitments (on tariff rates, procedures, commodity classification, etc.) and beneficiaries' recommendations as well as those of experts to propose legal framework reforms commensurate with the roadmap for tariff reduction in the period 2022 – 2027.

Following this sub-activity, the Program will later conduct an assessment and analysis of the implementation of tariff commitments and tariff policies in the FTAs that Vietnam has adopted through quantifying and visualizing tariff commitments; forecasting future impacts on the financial sectors; and recommending policy on FTAs tariffs, Most Favored Nation (MFN) tariffs, and approach to market opening. The study thereby will enable MOF to be more proactive in proposing the tariff commitments.

Methodology: This sub-activity starts with developing a handbook on the tariff reduction roadmap and FTA implementation guidelines, and organizing workshops/seminars in 3 regions with businesses and experts. The sub-activities will then include a survey-based study which will collect feedback and comment from the manufacturers and traders community on FTA implementation and help to inform the regulatory agencies that are directly administering tax and customs operations and trade facilitation.

The USAID Trade Facilitation Program will mobilize resources of national specialists and experts to undertake planned activities. The national experts will work closely with the Program’s technical team, communication team and collaborate with officials from the MOF ICD to develop the communication products and undertake the studies.

Tasks & Responsibilities:

The local/national STTA Trade and Tariff Expert will be responsible for

1. Develop the handbook publicizing tariff reduction roadmap and FTA implementation guidelines for sectors (Bilingual); among others the specific tasks will include:

• Desk research and collaboration with MOF on the concept and contents of the handbook on tariff reduction roadmap and FTA implementation guidelines;
• Consult with businesses on their needs relating to the handbook;
• Drafting the handbook based on information and material gathered;
• Consult the businesses and regulatory agencies on the draft handbook; and
• Revise and finalize incorporating the comments and feedback from businesses and regulatory agencies.

2. Contribute written and verbal inputs and make presentations to the workshops/seminars: tentatively in 3 regions with businesses and experts.

3. Soliciting and collecting feedback from the manufacturers and traders community on FTA implementation

Collect and synthesize the problems encountered in the implementation of the FTA commitments (on tariff rates, procedures, commodity classification, etc.) and beneficiaries' recommendations, as well as those of experts’, to propose the legal framework reforms commensurate with the Roadmap for tariff reduction in the period 2022 -2027.

Deliverables:

• Draft and finalized Handbook on tariff reduction roadmap and FTA implementation guidelines (Bilingual) ;
• Inputs to the workshops/ seminars: tentatively in 3 regions with businesses and experts ;
• Report on FTA implementation issues to feed into next cycle of FTAs tariff commitments implement decree; and
• Final report containing details of all work carried out in areas assigned.

Qualifications:

The local/national STTA Trade and Tariff Expert is expected to meet the following essential qualifications:

• Master's degree or higher in trade policy, international trade, international economics, international trade law, customs administration, business administration, or similar field;
• Minimum 10 years of experience coordinating with host government counterparts on programs of a similar focus, on topics such as international trade law, international trade agreements, trade facilitation, customs management and procedures, regional economic integration, etc.;
• Working knowledge, understanding and work experience with the WTO instruments such the Trade Facilitation Agreement (TFA), Tariff Analysis, and the WCO Nomenclature and Classification; and of relevant free trade agreement (FTAs), especially on tariff policy, anti-dumping and countervailing duty circumvention and topics commonly found in preferential tariff legislation.
• Working English writing and speaking skills, and presentation skills;
• Proficient with office software such as Microsoft Word, Excel, PowerPoint, Google Applications, and software for data visualization and infographics

Reporting:

The local/national STTA Trade and Tariff Expert will report periodically to the Senior Trade Facilitation Expert and on a regular (weekly) basis to the Program’s Customs & Trade Facilitation Expert.

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