Bilateral free trade agreement to be signed in early 2015 after more than two years of negotiations.
Minister of Industry and Trade Vu Huy Hoang and the Republic of Korea (RoK)’s Minister of Trade, Industry, and Energy Yoon Sang-jick signed minutes on the conclusion of negotiations over the Vietnam-RoK Free Trade Agreement (FTA) on December 10 in Busan.
The signing was witnessed by Prime Minister Nguyen Tan Dung and President Park Geun-hye during the former’s working visit to the RoK to attend celebrations of the 25th anniversary of ASEAN-RoK dialogue relations.
The FTA primarily focuses on the trading of goods (commitments to tax cuts) and services (including an appendix on telecom, finance and others), investment, intellectual property, measures on food hygiene and safety, rules of origin, customs facilitation, trade defense, technical barriers in trade, e-commerce, institutions and law, and economic cooperation.
The RoK will offer tariff cuts and new export opportunities for Vietnam’s key agro-fishery products, including shrimp and fish and tropical fruits, and industrial products such as garments and textiles and mechanical products.
In addition, the RoK agreed to offer more opportunities for Vietnam’s services and investment while enhancing economic cooperation and providing technical assistance in various fields. Remarkably, for the first time the RoK allows Vietnamese garlic, ginger, honey, and shrimp to enter its market, giving an advantage to Vietnam over other competitors in the region.
In return, Vietnam will offer preferential treatment for the RoK’s industrial products such as materials and accessories for textiles and garments, plastic materials, electronic parts, trucks and cars of 2,500cc and over, automobile parts, electrical home appliances, iron and steel products, and electric cables. The RoK will liberalize tariffs on 95.43 per cent of its tax lines while Vietnam pledges to do so on 89.75 per cent of its tax lines.
The two countries began FTA talks in August 2012. After eight official negotiation rounds and eight mid-term and chief negotiator meetings, the two sides basically approved the contents of the agreement.
The FTA is expected to help improve import efficiency in the production of export staples such as garments and textiles, footwear, and electronics, while increasing the rate of high-added value products. Other commitments on services, investment, a transparent and open investment climate and fair competition in accordance with international rules are expected to increase investment from the RoK, especially in the high-technology and processing industries.
The two sides are completing outstanding technical issues and necessary procedures so as to officially ink the FTA in early 2015, according to the government’s portal.