Cashew, tea, and peper exports to Peru are tax-exempt

Peru's Congress approved the CPTPP, three years after it was signed in March 2018. The  South America country becomes the eighth nation to ratify the pact.

Peru will enter into the CPTPP 60 days after announcing the deal with transit nation New Zealand. As a member of the CPTPP, Vietnam will gain from Peru's ratification of the Agreement in two ways: first, by increasing bilateral trade, and second, by expanding the market for export products.

Vietnam's primary exports to Peru are phones, electronic components, computers, shoes, clinker, cement, textiles, and seafood. Peru agreed to removing 81% of tariff lines immediately upon the Agreement's implementation, equal to 62% of Vietnam's export revenue, and to eliminating duties on 99.4 % of tariff lines in the 17th year.

CPTPP is Vietnam and Peru's first free trade agreement. According to the Ministry of Industry and Trade's suggestion, certain exporters should grasp the opportunity immediately, since furniture items would be taxed at zero percent once the Agreement takes effect. Agricultural goods such as cashew nuts, tea, pepper, vegetables, and some varieties of coffee are also tax-exempt. Tax rates on textiles and footwear are being lowered following the plan and will reach 0% in the 16th year.

Peru is a prospective market, importing about 350 million USD worth of footwear each year, mostly fake leather and plastic components. Small and medium-sized businesses account for 75% of Peruvian import and export businesses. Vietnamese products benefit from favorable circumstances for penetration, competition, and easy access to Peru's neighboring nations, including Ecuador, Colombia, Bolivia, and Brazil.

Vietnam and Peru have strengthened bilateral economic ties in recent years. Before the Covid-19 epidemic, bilateral trade turnover rose 48.3 percent in five years, from USD284.96 million in 2014 to USD422.73 million in 2017. (2019).

In the first six months of 2021, bilateral trade reached USD 278.27 million, an increase of 78.7 percent over the same time in 2020. Vietnam's exports to Peru, in particular, increased by 103.6 percent to USD242,49 million.

Additionally, Vietnamese exporters to Peru benefit from the country's easier import restrictions than those of other nations with comparable market sizes.

Peru's membership is the next step in the CPTPP's development, after the agreement by the Agreement's 11 member nations to ask the United Kingdom to begin the accession process in June 2021. Previously, the UK sought to join in February 2021.

According to Reuters, the CPTPP's strength is the removal of 95% of tariffs between the CPTPP's existing 11 members, which include Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile, and Malaysia. Within 60 days, this list will be updated with Peruvian names.