The relationship between Vietnam and Japan has developed in various fields, especially since October 2006, when Prime Minister Nguyen Tan Dung officially visited Japan and opened a new phase of co-operation towards “strategic partnership between Vietnam and Japan for peace and prosperity in Asia".
In December 2008, the two countries signed Vietnam – Japan Economic Partnership Agreement (VJEPA). This is a comprehensive bilateral agreement that will boost trade liberalization of goods and services, economic cooperation and investment. One of the major parts of the Agreement focuses on economic cooperation in such areas as agriculture, industry, trade and investment, development of human resources, tourism, and transportation.
According to Japan’s commitment, the average tariff rate applied for Vietnamese goods exported to Japan will gradually be reduced to 2.8% by 2018. When the EPA comes into effect, at least 86% of agro-forestry- aquatic products and 97% of Vietnamese industrial products exported to Japan will benefit from preferential tariff rates. In return, the average tariff rate applied for Japan’s products exported to Vietnam will gradually be reduced to 7% by 2018. Aquatic, farm products, apparel, steel, chemicals, electronic appliances will benefit most from the commitment to trade liberalization. As such, within the next 10 years, Vietnam and Japan will realize a tariff reduction toward a bilateral free trade area, allowing over 94.5% of Vietnam’s export revenues and over 87.6% of Japan’s exports revenues to be exempted from import tariff. Apart from trade liberalization, investment and cooperation between the two countries will be protected.
This is an agreement on comprehensive economic partnership, not merely a free trade agreement. Therefore, not only trade of goods but also services would be liberalized. It can be said that the Agreement will open up opportunities for businesses as well as consumers of the countries to access capital sources, modern technology, materials and goods in the most effective way.
VJEPA created many opportunities but also challenges for Vietnamese enterprises.
Vietnam is participating in the global market. Through open bilateral or multilateral trade, global partners will open their markets to Vietnam and vice versa, Vietnam must also open its market for them. After the Agreement comes into effect, exports from Vietnam to Japan will be increased and expanded. But the fact is that competition between businesses of the two countries will increase, the trade balance will depend on the enterprises.
The Japanese quality requirements are very strict. The food consumption motto of Japan is "safe and nutritious fresh". So, in order to break into the Japanese market, Vietnamese exported goods must attain the required standards given by the Japanese importers. Agricultural products account for a large proportion of Japanese imports from Vietnam. Along with special tariff preferences in VJEPA for this category which is an opportunity for Vietnamese exporters of agricultural products, great attention should be paid to safety standards of food hygiene or otherwise, it could be very difficult to get into this market. So, the strict requirements for quality, hygiene and food safety are big challenges for Vietnam’s enterprises.
In addition, to prepare for access to the Japanese market, Vietnamese enterprises will have to compete with enterprises of other countries in Japan, especially China. Vietnamese enterprises are still weak at market access, it is therefore necessary to set up a distribution system right in the Japanese market.
Being aware of this issue, the Vietnam Trade Promotion Agency has developed trade promotion activities to support and guide Vietnamese enterprises such as market research, training courses/ conferences/workshops to help our businessmen to build their own brands, improve competitiveness, enhance and expand exports into the Japanese market. This is an effort to ensure that all the elements for the two countries' bilateral trade reach effective results, not only for Japanese commodities to get into Vietnam’s market, but also for Vietnam's goods to penetrate the Japanese market.
The Vietnamese Prime Minister Nguyen Tan Dung recently paid an official visit to Japan, from October 30 to November 2, 2011. During his visit, Prime Minister Nguyen Tan Dung was received in an audience by His Majesty the Emperor of Japan, held a summit meeting with Prime Minister Yoshihiko Noda and met with distinguished figures of the National Diet of Japan. Prime Minister Nguyen Tan Dung also visited Sendai City and Natori City in Miyagi Prefecture. A joint statement on the actions taken under strategic partnership between the two countries has again confirmed that the relationship of comprehensive cooperation and friendship between Vietnam and Japan would be further deepened.
Acting as a core in the comprehensive relationship between Vietnam and Japan, economic cooperation has been developing very successfully. Currently, Japan is the third largest trade partner of Vietnam. The year 2010 marked the significant recovery of the two countries bilateral trade, turnover reached more than USD 16 billions, up by nearly 22% in comparison with 2009. In 2011, two-way trade turnover remained at a relatively good level.