35 C
Ho Chi Minh City
Saturday, May 18, 2024

Vietnam’s shrimp exports to South Korea face technical hurdle – VASEP

By Chinh Phong

Must read

HCMC – While South Korea’s seafood exports to Vietnam enjoy a zero duty, Vietnamese shrimp exporters are encountering a major restriction from entering the South Korean market, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

On April 15, VASEP wrote to the prime minister, the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development, and the Ministry of Foreign Affairs, urging them to request South Korea to remove an import quota for Vietnamese shrimps, as per the Vietnam-Korea Free Trade Agreement (VKFTA).

If this situation persists, it will prevent businesses in Vietnam from expanding shrimp exports to South Korea, VASEP said.

According to the VKFTA, which came into effect at the end of 2015 and is now in its 10th year of implementation, most seafood items are subject to a 0% duty.

However, under Appendix 2A-1 on tariff quota management by South Korea of the VKFTA, there are still seven categories of seafood products imported from Vietnam into South Korea that only enjoy tariff benefits up to a certain quota.

Specifically, South Korea grants these products a quota of 15,000 tons per year duty-free under the VKFTA. Any imports exceeding this quota are subject to a 20% basic tariff.

In contrast, according to the latest updated import tax schedule of Vietnam (in 2024), all seafood imports from South Korea into Vietnam are tariff-free. Thus, while Vietnam has fully opened its doors to South Korean seafood, its shrimp exports are still subject to a quota when entering South Korea.

This situation has led importers to consider buying shrimp from other countries, such as Peru, which has a free trade agreement with South Korea, resulting in a 0% import tariff within 5-7 years, thus eliminating all tariff advantages under the VKFTA for Vietnamese frozen shrimp products in the South Korean market, according to VASEP.

VASEP said that it is essential for South Korea to consider removing the tariff quota mechanism for Vietnamese shrimp under the VKFTA to protect the market share and long-term interests of Vietnamese shrimp in this market.

It added that South Korea may be supportive of this proposal, as the country is currently facing inflation and a surge in food prices. The South Korean government has been proactively reducing import duties on some items and seems willing to consider other solutions to reduce imported food prices, including discussing adjustments to VKFTA tariffs.

In recent years, the VKFTA has had a positive impact on Vietnam’s key export products to South Korea, including seafood. Vietnamese seafood exports to South Korea increased by 62% from US$585 million in 2015 to US$950 million in 2022, falling to US$786 million in 2023.

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest articles