1. General Information
- Full name: Vietnam – Chile Free Trade Agreement
- Abbreviation: VCFTA
- Members: Vietnam and Chile (This is a bilateral free trade agreement).
- Date of signing: November 11, 2011 (in Hawaii, USA).
- Effective date: January 1, 2014.
Negotiation Background and Rationale for the FTA
Background: The negotiation process of the VCFTA was launched in October 2008.
Although Vietnam and Chile had maintained good diplomatic and economic relations, direct trade between the two countries still faced numerous barriers, including tariffs and geographical distance.
Significance:
- First FTA with a Latin American country: VCFTA is Vietnam’s first free trade agreement with a Latin American nation and its second bilateral FTA overall (after the Vietnam–Japan Economic Partnership Agreement – VJEPA).
- Access to the Latin American market: The main objective is to help Vietnamese goods—particularly agricultural products, textiles, and footwear—gain access to the Chilean market and, through it, penetrate deeper into the broader Latin American region.
- Strengthening partnership: The Agreement establishes a stable, transparent, and predictable legal framework to promote bilateral cooperation in trade, investment, and economic relations.
- Nature of the Agreement: VCFTA is considered a traditional FTA, focusing mainly on trade in goods and related matters such as rules of origin, customs procedures, and TBT/SPS measures, without deep commitments on services or investment as in modern FTAs (e.g., CPTPP, EVFTA).
2. Scope and Key Commitments
The VCFTA consists of 14 Chapters and attached annexes, primarily focusing on trade in goods liberalisation.
| Chapter | Chapter Title (Vietnamese) | Main Content |
|---|---|---|
| 1 | General Provisions | Scope; relationship with other agreements; definitions. |
| 2 | Trade in Goods | Commitments on tariff reduction and elimination. |
| 3 | Rules of Origin | Criteria for determining the origin of goods eligible for preferential tariffs (C/O Form VC). |
| 4 | Customs Procedures | Rules on customs administration and trade facilitation. |
| 5 | Sanitary and Phytosanitary Measures (SPS) | Ensures food safety and protection of animal and plant health. |
| 6 | Technical Barriers to Trade (TBT) | Reduces unnecessary obstacles caused by standards and technical regulations. |
| 7 | Trade Remedies | Rules on applying safeguard; anti-dumping; and countervailing measures. |
| 8 | Bilateral Safeguards | Specific safeguard mechanisms under the bilateral framework. |
| 9 | Transparency | Ensures transparency in laws and administrative regulations. |
| 10 | Institutional Provisions | Establishes the VCFTA Joint Trade Committee. |
| 11 | Dispute Settlement | Mechanisms for resolving disputes between the two governments. |
| 12 | Exceptions | Allows measures to protect national security and public morals. |
| 13 | Cooperation | Defines areas of economic and technical cooperation. |
| 14 | Final Provisions | Rules on entry into force; amendment; accession; and termination. |
Tariff Commitments Highlights
Chile’s Commitments (in favour of Vietnam): Chile pledged a very high level of tariff elimination, covering 99.62% of total tariff lines by the end of the implementation schedule (by 2029), equivalent to almost all of Vietnam’s export value to Chile.
Vietnam’s Commitments (more gradual schedule): Vietnam committed to eliminate tariffs on 87.8% of total tariff lines by the end of its schedule (by 2028).
3. Reference Documents and Official Sources
Full Text of the FTA
Vietnam FTA Portal (Ministry of Industry and Trade): The most official and reliable information source.
- Full text of the VCFTA (in both Vietnamese and English).
- Tariff commitment schedules of Vietnam and Chile.
- Product-specific rules of origin (PSR).
- Link: Search “VCFTA” at https://vntr.moit.gov.vn/
Implementation Guidelines
- Rules of Origin (Ministry of Industry and Trade): Circular No. 31/2013/TT-BCT (and subsequent amendments/replacements) stipulates rules of origin under the VCFTA and procedures for issuing C/O Form VC.
- Tariff Regulations (Ministry of Finance): Government Decree on Preferential Import Tariff Schedules for implementing the VCFTA in specific periods (e.g., Decree No. 112/2022/NĐ-CP for 2022–2027).
- Business Support Organisations: Vietnam Chamber of Commerce and Industry (VCCI) – WTO and Integration Center provides handbooks, training materials, and guidance for enterprises to effectively utilise VCFTA preferences.
