The Biden administration recently announced advances in U.S.-Vietnam trade relations, including plans for Vietnam to reduce its Most Favored Nation tariff rate on imported frozen pork cuts. Vietnam’s current MFN rate, which applies to U.S. pork cuts, is 15%. Reports suggest that the rate will soon be lowered to 10% – the same reduction that was temporarily implemented in the second half of 2020 in an effort to bolster pork supplies and stabilize prices as Vietnam dealt with the impact of African swine fever. This temporary rate reduction expired Jan. 1, 2021.
U.S. Meat Export Federation Economist Erin Borror notes that the proposed rate reduction is a step in the right direction that will narrow the tariff disadvantage U.S. pork faces in this price-sensitive market. Canadian pork enjoys favorable tariff treatment under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, while European pork enters at a reduced rate under the EU-Vietnam FTA. Russia also has a trade agreement with Vietnam that includes duty-free access for Russian pork.
Borror adds that the tariff relief appears to be well-timed, as the COVID-19 pandemic has created pork production obstacles that may be slowing Vietnam’s ASF recovery efforts.
Comments