June 2, 2020
With its domestic pork production heavily impacted by African swine fever, Vietnam has announced reductions to its most-favored-nation tariff rates for imported pork. Effective July 10, the MFN rate for frozen pork muscle cuts will drop from 15% to 10%, with the lower rate remaining in effect through the end of this year. The MFN rate for frozen pork variety meat will remain at 8%. The MFN rate for chilled pork muscle cuts will decline from 25% to 22%.
"USDA estimated Vietnam's pork production last year was down at least 15% and that it will fall by more than 5%," says Erin Borror, U.S. Meat Export Federation economist. "Again, this year, the swine inventory dropped by 13% and so there's been some talk for many months now about Vietnam potentially reducing import tariffs because despite a surge in hog and pork prices, imports have not grown enough to fill the shortage and unlike other countries where pig prices have moderated recently, especially for example, in China, Vietnam prices continued to set new highs. So with that, and obviously overlaid with the economic impact of the coronavirus, the government is looking to further increase imports and stabilize these pork prices in Vietnam."
Borror notes that these MFN rate reductions are especially timely for the U.S. industry, because Vietnam’s tariff rates for frozen Canadian pork currently stand at 9.3% for muscle cuts and 4% for variety meat under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Vietnam's imports of pork from the European Union will soon receive similar tariff relief under the EU-Vietnam Free Trade Agreement, which Vietnam's National Assembly is expected to ratify this month.
"Tariff freight on frozen pork dropping from 15% to 10% and that's just for the rest of this year, so that's fairly comparable with what Canadian pork is paying under CPTPP," Borror says. "While the rate on most variety meats remains at 8%, it's not entirely clear to me when the EU Vietnam FTA will be implemented in fact, but it's basically in the final stages … this, at least in the short run, puts the U.S. and everyone else essentially on a level playing field. Of course in the future, if tariff rates adjust back, we would be at a disadvantage."
In the first quarter of 2020, U.S. pork and pork variety meat exports to Vietnam increased 251% from a year ago to 4,382 metric tons, valued at just under $10 million (up 182%).
Source: U.S. Meat Export Federation, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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