Exporters benefit from Vietnam- Korea FTA

Pham Xuan Trinh, general director of Phong Phu Corporation, said the company has made good use of the FTA to export denim to the Korean market. Denim is among the products which are not easily exported as it is heavy, costs more to transport and requires short production time.

However, Phong Phu has met the requirements of Korea and its exports are rising, Trinh said.

In addition to garment, seafood exporters will benefit. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), shrimp exports to Korea will enjoy favorable conditions this year as seven tariff lines on shrimp are removed under the FTA. In particular, the country will offer a zero tariff for 10,000 tons of shrimp from Vietnam in the first five years and 15,000 tons in the five following years.

More Vietnamese seafood is poised to enter the Korean market owing to lower transport cost in comparison to some South American countries which send high seafood volumes to Korea. Besides, with the removal of import tariff, Vietnamese products will be more competitive.

Last year, Vietnam exported almost US$238 million worth of shrimp to Korea, down 25% against 2014, though this market remained the fifth biggest shrimp importer of Vietnam after the United States, Japan, the European Union and China.

According to VASEP, shrimp exports to the Republic of Korea will surge in the future following tax incentives pledged in the trade deal.

Exporters of other seafood products like squid and octopus will have the opportunity to increase shipments to Korea. Vietnam’s squid and octopus exports to that market amounted to VND163 million last year.

VASEP said Korea imports squid and octopus from 22 markets and that Vietnam is the biggest supplier, followed by Chile and Peru. Korea is Vietnam’s biggest importer of these products, accounting for 38% of the total.