Maximizing VJEPA benefits for Vietnamese businesses

This bilateral free trade agreement, which officially commenced in 2009, aims to bolster economic ties between the two countries through preferential tariffs and closer cooperation across various sectors¹. If you’re running a business in Vietnam, VJEPA offers significant trading perks and opportunities for you, particularly in key industries like manufacturing, agriculture, and technology. 

However, to truly capitalize on the vast potential this agreement offers, a strategic approach to logistics and supply chain management is paramount. Read on to discover how DHL Express Vietnam can help you make the most of these opportunities. 

Opportunities presented by VJEPA: Expanding Japan-Vietnam trade

VJEPA significantly enhances economic cooperation and strengthens trade relations between Japan and Vietnam. This closer relationship paves the way for increased imports from Japan and greater export opportunities to Japan.

Reduced tariffs

VJEPA offers substantial reductions in tariffs for trade between the two nations. For example, Japan committed to eliminate tariffs for 96.45% of the total tariff lines for Vietnamese goods by the end of 2026, benefitting products from the agricultural, seafood, and industrial goods sectors¹. As such, the export potential of these Vietnamese products in Japan has increased significantly. 

In turn, Vietnam also pledged to remove 90.64% of the tax lines for Japanese goods¹. These lower tariffs can directly benefit you by decreasing the cost of importing goods from Japan and making your exports to Japan more competitive. 

Increased market access

Japan's gross domestic product (GDP) was ranked as the world’s fourth largest in 2024, with a GDP of approximately US$4070 billion². Unsurprisingly, the market offers lucrative opportunities for trade, and VJEPA offers significantly increased access to it. 

For example, the reduction of tariffs on Vietnamese goods entering Japan grants them a lower price and competitive edge in the market. This enhanced market access allows you to reach a broader consumer base in Japan, fostering growth in sectors like textiles, footwear, and processed foods.

Investment opportunities

Since VJEPA’s implementation, there has been an increase in Japanese foreign direct investment activities in Vietnam, ranking among the top five investors in the Vietnamese market from 2009 to 2020³. 

Attracted by factors like a growing economy and preferential treatment under VJEPA, this influx of investment benefits business in Vietnam through technology transfer, job creation, and the development of supporting industries.

Overcoming challenges in VJEPA logistics and supply chain management

While VJEPA offers significant advantages, engaging in trade with Vietnam and Japan can present certain logistics challenges. For example, slower transit times and complex customs procedures may pose a hurdle for businesses as trade volume between Japan and Vietnam increases. 

As such, a well-optimized supply chain becomes essential to maximize these advantages. By adopting strategic solutions and optimizing your logistics operations, you can effectively overcome these hurdles and maximize the trade agreement benefits.

Long transit times

With the anticipated rise in trade spurred by VJEPA's reduced tariffs, transit times may become longer. 

In turn, reliable transportation becomes a key consideration when importing from or exploring export opportunities to Japan. This is particularly salient considering the higher volumes of shipments moving between the countries. 

To mitigate this, consider the following strategies:

• Optimize route planning: Analyze and select the most efficient shipping routes, taking into account factors like distance, congestion, and available transportation options to reduce transit durations.
• Utilize express shipping services: For time-sensitive goods, explore delivery express options offered by a reliable logistics solutions provider like DHL Express to ensure quicker delivery.
• Leverage technology and data analytics: Employ real-time tracking and data analytics to monitor shipments, identify potential delays, and make proactive adjustments to your logistics plan for better efficiency.

Inventory management 

As your trade with Japan grows under VJEPA, efficient inventory management becomes increasingly important. Strategic warehousing can help you manage inventory effectively, such as by accommodating larger volumes of products and ensuring timely distribution. 

When considering warehouse options, consider its location in relation to transportation hubs and your supply chain needs. Do also determine if you require specialized storage for certain goods, such as frozen foods or dangerous goods.

Additionally, a robust inventory forecasting system is also crucial to help you anticipate demand and reduce the need for urgent, time-critical shipments. This might involve adopting advanced tracking technologies or partnering with a logistics solutions provider that offers scalable and strategically located facilities to support your expanding trade activities.

Complex customs procedures

Complex customs procedures can potentially lead to delays and increased costs when importing goods from Japan or managing exports. 

Consider these solutions to minimize customs delays, ensure the smooth transit of your goods, and fully leverage the trade agreement benefits under VJEPA:

• Engage expert customs brokers: Partner with experienced customs brokers who possess in-depth knowledge of Vietnamese and Japanese regulations to ensure accurate documentation and smooth clearance.
• Utilize digital customs platforms: Leverage online platforms and digital tools for customs declarations where possible to expedite the process and reduce paperwork errors.
• Ensure accurate documentation: Meticulously prepare all required documents, such as invoices, packing lists, and certificates of origin, adhering strictly to the specified formats to avoid holds and penalties.
• Implement compliance programs: Establish internal compliance programs to stay updated on the latest customs regulations and ensure consistent adherence, thereby minimizing the risk of complications.

Varying regulatory requirements

Dealing with the varying regulatory requirements between Vietnam and Japan can present complexities for businesses involved in VJEPA trade, impacting everything from product standards to labeling and documentation for both imports and exports. 

Here’s how you can address these challenges:

• Conduct thorough research: Understand the specific import and export regulations, standards, and certification requirements for your products in both countries before initiating trade.
• Seek expert consultation: Engage with legal or trade consultants who specialize in Vietnam’s and Japan’s regulatory frameworks to ensure full compliance and avoid potential legal issues.
• Maintain open communication: Foster clear communication with your suppliers and buyers in both countries to ensure mutual understanding and adherence to all applicable regulatory requirements, facilitating smoother trade.

DHL Express: Your strategic logistics partner

Streamlined logistics and supply chain management are not just beneficial – they are essential for your business to effectively capitalize on the trade agreement benefits offered by VJEPA. 

As such, a reliable international shipping provider like DHL Express can significantly enhance your ability to overcome the challenges involved. As a trusted partner, we offer tailored logistics solutions designed to support your VJEPA trade endeavors. Look forward to:

• Faster and more reliable shipping times: Our efficient processes ensure your shipments between Vietnam and Japan are handled with speed and precision, minimizing delays and improving your supply chain efficiency.
• Expert customs clearance services: Our experienced customs teams possess in-depth knowledge of both Vietnamese and Japanese regulations, ensuring smooth and compliant clearance for your goods.
• Dedicated account management and support: Receive personalized support from our dedicated account managers who understand your unique business needs and provide tailored guidance for your VJEPA trade activities.
• Advanced tracking and visibility: Our cutting-edge tracking systems provide real-time visibility into your shipments, allowing you to monitor their progress and proactively manage your supply chain.
• Access to DHL's global network and logistics expertise: Benefit from our global network and decades of logistics expertise, ensuring seamless and reliable transportation and delivery solutions for your trade.

Achieve VJEPA success

Ready to unlock the full potential of the Japan-Vietnam Economic Partnership Agreement? Let us be your partner in realizing the opportunities that VJEPA has to offer.

Open a business account with us today and experience the benefits of our reliable, efficient, and tailored logistics solutions.