08:01 | 28/05/2015 Trade
(VEN) - The signed Vietnam-Republic of Korea Free Trade Agreement (VKFTA) with the open market commitments for seafood will create great opportunities and competitive advantage for Vietnamese businesses in promoting exports to this market.
The agreement will take effect after the two sides complete procedures. Vietnamese goods will benefit by this agreement as the Republic of Korea (RoK) will reduce 95.4 percent of the number of tariff lines to zero percent, especially for agricultural products, seafood and industrial goods such as shrimp, crab, fish, tropical fruits, garments and textiles, furniture and engineering products.
The RoK will exempt Vietnamese shrimp from taxes with quota of 10,000 tonnes per year and this figure will gradually increase to 15,000 tonnes per year in the next five years. The RoK is the fourth biggest shrimp importer of Vietnam after the US, Japan and the EU. Shrimp export turnover to the RoK recorded a significant growth of 41 percent, reaching nearly US$318 million in 2014.
Squid and octopus are also included in the list of products which attract RoK consumers. While the export value of the two items are on a fall in Japan, the RoK market witnesses an increase. In the first quarter of this year, export turnover of squid and octopus to the RoK reached US$35.8 million, accounting for 41.2 percent of total export turnover.
In a context where Vietnam is fiercely competing with regional countries such as China, Malaysia, Thailand, Indonesia and India, the VKFTA will bring competitive advantage for Vietnamese goods.
According to the General Department of Vietnam Customs’ statistics, in the first quarter of this year, the export value of seafood to the RoK reached more than US$118.838 million, ranking fourth after garments and textiles; computers, electronic products and components; and phones and accessories.
Vietnam Association of Seafood Exporters and Producers (VASEP) Secretary General Truong Dinh Hoe said that Vietnamese shrimp is dominating the RoK market thanks to good quality and reasonable prices. Plus incentives from the VKFTA, Vietnamese shrimp are able to account more market share.
However RoK consumers have had strict requirements in terms of the uniformity and product quality, especially food safety and hygiene. Therefore, Vietnamese businesses need to pay special attention to these issues.
Vietnam Trade Promotion Agency Director Bui Huy Son said that Vietnamese businesses need to understand the contents and catch up opportunities from the VKFTA to promote exports and expand market./.
By Nguyen Phuong