Viet Nam-Korea Free Trade Agreement Helps Shrimp Trade

26 February 2016, at 12:00am

VIET NAM - Thanks to the free trade agreement between Viet Nam and South Korea in effect from 20 December 2015, businesses in some sectors are pushing exports to this market, including commodities that are hardly exported.

Seafood is one of the products benefiting from the free trade agreement.

In 2016, shrimp exports to Korea will have advantages thanks to the free trade agreement between the two countries. Seven different tax lines on Vietnamese shrimp were deleted.

South Korea also committed to provide tariff quotas for 10,000 tonnes of Vietnam shrimp in the first year, rising to 15,000 tonnes after 5 years with a import-export tax of 0 per cent.

As a result, Viet Nam's shrimp have more advantages over other countries in the ASEAN region such as Thailand, Indonesia, Malaysia, while South Korea only give quotas of 5,000 tons for ASEAN.

Vietnamese seafood is forecast to penetrate deeper into South Korean market, with advantages such as lower freight costs compared to some rival countries in South America.

In addition, with the elimination of import tariffs, Vietnamese seafood prices in Korean markets will be cheaper than before, thereby encouraging people to consume more.

In 2015, Vietnam's shrimp export to South Korea reached nearly US$238 million, down 25 per cent from 2014, but the country still is the fifth shrimp import market of Vietnam, just after the US, Japan, EU and China. With incentives from the free trade agreement, Vietnam's shrimp exports to the country will continue strong growths.

In addition to frozen shrimp, the other seafood products such as squid, octopus continue to have opportunities in the market. In 2015, the export of cephalopods to South Korea reached more than US$163 million.

Around 22 countries are exporting cephalopods to the Korea market, in which Viet Nam holds first place, followed by Chile and Peru. South Korea is currently the biggest importing market for Viet Nam cephalopods, accounting for 38 per cent of Viet Nam's total exports.