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Vietnam - Korea Free Trade Agreement (VKAFTA) officially signed

Updated by: Phước TâmWednesday, December 30, 2015 2:18:47 PM

Vietnam - Korea Free Trade Agreement (VKFTA) officially launched negotiation in August 2012. After 8 rounds of official negotiations and 8 rounds of negotiations of Head of Delegation level, and mid-term negotiations, the two sides have completed negotiations on Dec. 10, 2014.

With the authorization of the two governments, the Viet Nam Minister of Industry and Trade Vu Huy Hoang and Korea Minister of Commerce, Industry and Energy Yoon Sang-jick officially signed Vietnam - Korea Free Trade Agreement (VKFTA) in Hanoi, Vietnam on May 05, 2015, in the presence of the Prime Minister of the Socialist Republic of Vietnam Nguyen Tan Dung and representatives of the related ministries and agencies of the two countries.

 

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Official signing ceremony of Vietnam - Korea free trade agreement (VKFTA)

          The main contents of the Agreement include Trade in goods, trade in services, investment, intellectual property, measures for food safety and animal and plant quarantine (SPS), rule of origin, customs facilitation, trade defense, technical barriers to trade (TBT), electronic commerce, competition, international cooperation, institution and legal ...

        Signing this agreement promises to bring major positive impact on Vietnam as:

          - Improving the business environment, using efficiently the human resources.

          - Some commodities such as agricultural products, seafood for export (shrimp, crab, fish, tropical fruits, ...), industrial goods (textiles, furniture, ...) and some other products such as garlic, ginger, honey, sweet tomatoes... of Vietnam will have more opportunity to expand into the South Korean market and enhance the competitiveness of export products of countries in the region such as China, Indonesia, Malaysia and Thailand.

        - Vietnam is an excess importer from Korea; so, reducing some imported tariff lines from Korea for industrial commodities like textile raw materials, garments, electronic components, automotive parts, electrical appliances... will help consumers, the importers as well as exporters using imported raw materials from Korea to have more benefit from this Agreement. In addition, it is expected that rules of origin in the FTA between Vietnam and the EU (EVFTA) will allow accumulation of origin of imported raw materials from Korea to enjoy preferential tariffs when exporting to the EU. If so, the tax reduction for the import of raw materials from South Korea under VKFTA will help enterprises also benefit from EVFTA.

Besides the above positive impacts, Vietnam is also facing new challenges from competitive pressures for businesses and the need to improve, build transparent legal environment, and raise the management level for state management agencies. Therefore, enterprises and state management agencies must be prepared to improve knowledge so that they can capture benefits that bringing from the Agreement as well as limiting its negative impact.

         According to the commitments, the Agreement shall enter into force on the first day of the second month after the date of announcement in writing of the parties through diplomatic channel on the completion of the internal procedures, or from the date which agreed by the Parties.

Source: Socongthuong.phuyen-Tô Thắm
Translated by Trần Đình Dũng

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