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Vietnam: Promising market, but highly competitive, price sensitive

National Pork Board U.S. pork is heavily featured in restaurants throughout Vietnam, especially by those with newer, more modern menu offerings.
On the pork side, Canada and Mexico will see the most benefit from Vietnam's reductions in pork import duties.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership entered into force Dec. 30 for the six countries (Japan, Mexico, Singapore, Canada, New Zealand and Australia) that ratified the agreement by the end of October. However, Vietnam ratified CPTPP in mid-November, so its implementation of the agreement began today and includes initial reductions in Vietnam's import duty rates for beef and pork from CPTPP participants.

“Vietnam is a significant market,” says Erin Borror, an economist with the U.S. Meat Export Federation. “There is an emerging food service industry that has got a lot of excitement. We also have some presence at retail so it an exciting, dynamic and truly emerging market but price is clearly very important, so this tariff advantage is really going to matter.”

On the pork side, Canada and Mexico will see the most benefit from Vietnam's reductions in pork import duties, according to Borror. Initially the duty rate for pork will drop from 15 to 11.2% under CPTPP, then decline to zero over the next seven years. For pork variety meat, the rate drops from 10 to 6%, then declines to zero over the next four years.

The main beef exporting countries in CPTPP are Australia, Canada, New Zealand and Mexico. Beef from Australia and New Zealand already enters Vietnam duty-free under existing trade agreements with the Association of Southeast Asian Nations.

Borror says the main beneficiaries of the CPTPP tariff rate reductions for beef will be Canada and Mexico, which will see Vietnam's import duties on boneless beef decline from 15 to 5% initially, then drop to zero in 2020. For bone-in beef, the duty rate declines from 20 to 6.6% initially and to zero in 2020. Vietnam's 10% duty rate on beef variety meat drops to 6% initially and is phased to zero over the next four years.  

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