Vietnam will have to remove import tariffs on most farm goods in 2018 and apply a tax rate of as low as 5% to the rest in line with the free trade agreements (FTAs) in which the country is a signatory.

The FTAs will bring about both pros and cons to Vietnamese enterprises. The import tax exemptions and cuts will put local businesses in the fields of husbandry, soy bean and tobacco in a disadvantageous position, heard an online conference of the agriculture sector in Hanoi City on April 9.

Vietnam has so far joined various FTAs including the ASEAN Trade in Goods Agreement (ATIGA) and those between ASEAN and Korea, ASEAN and India, ASEAN and Australia/New Zealand, ASEAN and Japan, and Vietnam and Japan.

As a result of the trade pacts, most agro-aqua-forestry products will be entitled to zero export and import tariffs while a small volume will be subject to a 5% tax rate in 2018. However, countries will set up technical barriers to limit imports and protect their domestic production.

Minister of Agriculture and Rural Development Cao Duc Phat said Vietnam is a farm produce exporting country, obtaining agro-aqua-forestry exports of US$31 billion in 2014. Local firms will benefit much from the country’s integration into the world’s economy when exporting competitive products such as rice, coffee, rubber, tea, pepper and fruit.

However, husbandry remains weak and Vietnam gave strong protectionism to the sector with taxes and safety regulations earlier. Things will be different in coming years when taxes are cut sharply or removed.

If suitable solutions are not adopted, Vietnam will become a big consumer of agricultural products and domestic production will contract while farmers will not be able to make profit, Phat warned.

“I’ve joined many negotiations and other countries only want to sell products to us,” Phat said.

“Australia and New Zealand said they are agricultural countries and Vietnam is a potential consumption market. Therefore, it is necessary to seek solutions to help both countries get benefits and promote advantages,” he gave an example.

Le Dinh Son, vice chairman of Ha Tinh Province, said that the sector will have to grapple with a host of challenges from the country’s further integration into the global economy if fails to reorganize production and prepare to deal with these.

Ha Tinh Province is facing difficulties in exporting farm produce and competing with imported goods. Local consumers still prefer foreign products, he said.

Son said exporters, officials and farmers in the northern province still lack information about export conditions, taxes and procedures.

Besides, tracking product origins is still a hard issue for local authorities. Delegates at the conference suggested the ministry set up a website to help businesses get updates about the nation’s integration process.