With the Vietnam-Korea Free Trade Agreement coming into effect in late 2015, the nation’s shrimp exports to the Republic of Korea have increased from US$285 million to US$386 million, according to the Vietnam Association of Seafood Exporters and Producers.
Photo: Cong Thuong newspaper
At present, the Republic of Korea (RoK) is the fifth largest importer of Vietnamese shrimp. Between 2008 and 2013, shrimp exports to the RoK enjoyed an increase from US$85 million to US$225 million.
The Vietnam-Korea Free Trade Agreement (VKFTA) was officially signed on May 5, 2015 and took effect as of December 20, 2015.
Under the RoK’s commitments to the VKFTA, the nation’s seven shrimp products that are exported to the RoK market will enjoy a zero per cent import tariff as opposed to the previous 20 per cent.
The RoK pledged to grant a tariff free quota of 10,000 tonnes of shrimp to Vietnam during the first year of the enforcement of VKFTA. This offers a huge opportunity for the country to make inroads into the RoK market as there is only a quota of 5,000 tons in place for Thailand, Indonesia, and Malaysia, each.
Over the course of the next five years, the RoK will increase this tariff quota to 15,000 tonnes to Vietnam with this level being maintained as of the seventh year.
The country is now the leading shrimp provider for the RoK, accounting for a 50.5 per cent of the overall market share while other competitors such as Thailand, Ecuador, and China make up only 9.6 per cent, 13.5 per cent, and 5.2 per cent, respectively. Vietnam has to face tough competition from these countries in terms of the prices of their shrimp products.
In order to take full advantage of the VKFTA, the VASEP has urged Vietnamese businesses to raise awareness about getting access to information on the VKFTA, applying advanced technologies, and outlining development orientations to meet importers' demands.