A conference on “FTA - South Korea’s import - export tariff preferences for Vietnamese enterprises” was recently held in Ho Chi Minh City by the Ho Chi Minh City Branch of the Vietnam Chamber of Commerce and Industry (VCCI-HCM) in collaboration with the South Korean Ministry of Strategy and Finance, the Ministry of Foreign Affairs and Trade, and the Korea Customs Service. The event provided information and solutions for Vietnamese companies to grasp commercial advantages and tariff preferences provided for countries with FTA with South Korea, especially when Vietnam and South Korea are expected to sign a Free Trade Agreement (FTA) in a few years to come.
According to experts, trade liberalisation is a major interest of many countries. Joining FTAs will force signatories to reform regimes, policies and business environments and help enhance overall economic competitiveness. If Vietnam signs FTAs, its goods will penetrate into global markets more easily because tariff barriers are removed. For its part, Vietnam will reduce import tariffs to 0.5 percent in 2013 and entirely abolished in 2018. Apart from boosting exports, FTAs will help Vietnamese companies to identify products of their advantages and redirect target markets.
Mr Kim Deok Ku, Member of the Ministry of Knowledge Economy of South Korea, said: South Korea has signed FTAs with 44 countries in the world and these FTAs are showing effects. The country inked the first FTA with Chile in 2004. Then, it clinched FTAs with Singapore, four countries in the EU Free Trade Association (EFTA), the Association of Southeast Asian Nations (ASEAN), India, Peru and 27 EU countries. In addition, South Korea and the United States have finalised all necessary procedures for their bilateral FTA to take effect from January 1, 2013, bringing the number of countries signing FTAs with the East Asian nation to 45.
He added that South Korea’s FTA with ASEAN member states came into effect for goods in June 2007, for services in May 2009, and for investment from September 2009. According to the South Korea - ASEAN FTA, South Korea committed to remove
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According to the Vietnamese General Department of Customs, South Korea is a major importer of Vietnamese goods, just after China and ASEAN. In the first 9 months of 2011, the two-way trade turnover reached US$12.7 billion, up 44.5 percent year on year. Vietnam and South Korea aim to raise bilateral trade revenue to US$20 billion by 2015.
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90.8 percent of tariff lines on Vietnam’s normal products, 7 percent on sensitive products and 3 percent on extremely sensitive products. In 2010, South Korea completed abolition of tariffs on Vietnamese goods exported to the South Korean market.
Vietnam enjoyed a growth in trade with South Korea after it signed Korea - ASEAN FTA. However, the value remains relatively low in relation to other countries. Thus, South Korea wants to further promote bilateral trade relations with Vietnam. For this purpose, the Governments of Vietnam and South Korea have decided to establish a cooperation committee to conduct feasibility study on bilateral FTA signing. This study has been completed. Vietnam and South Korea will start negotiations on bilateral FTA in early 2012 and this will open up opportunities for business cooperation between the two countries.
Mr Sim Jin Su, Director of Industrial Support Division of the FTA Promotion & Policy Adjustment Authority under the Ministry of Strategy and Finance, said: Unlike the Korea - ASEAN FTA, the bilateral Vietnam - South Korea FTA will be expanded, with more taxes to be cut in a shorter schedule. This will help further strengthen two-way economic cooperation.
An official from South Korean Department of Small and Medium Businesses pledged to support Vietnamese companies to access FTA information and consultancies.
My Chau
Vietnamese
