Vietnam businesses brace for bounty of Brazil's market
Hanoi, Viet Nam News/Asia News NetworkHanoi, Viet Nam--Vietnamese businesses will have a major opportunity to crack Brazil's lucrative domestic market when import taxes are cut later this year, according to Viet Nam's trade office in Brazil.
August 12, 2013, 12:01 am TWN
The South American powerhouse is set to cut import rates across 100 industrial products, including steel, petrochemicals, pharmaceuticals, and construction materials.
Whilst tax rates increased last year in an effort to shield local industries from currency fluctuations, industrial import taxes are expected to drop by more than half, from 25 percent to 8-10 percent.
The cuts follow strong growth in Brazil's import market by almost 22 percent in 2012, driven by solid population growth and dramatic increases in spending power.
Firms are beginning to realize the potential of tapping into this huge market, the office said. Vietnamese products have priced well below foreign competitors, enticing Brazilian businesses to ramp up imports and distribution, it said, adding that bilateral trade had seen major growth over the past decade. Two-way trade reached over US$1 billion in the first half of this year, up 31.2 percent, while Vietnamese exports to Brazil climbed 57.6 percent, reaching US$499.4 million, according to the General Department of Customs.
Despite impressive growth, the market share of Vietnamese exports account for only 0.3 percent of Brazil's imports.
Experts are advising businesses to accelerate trade promotions to take full advantage of the lower taxes.