Korea-Vietnam FTA Concluded after 28 Months of Talks
Korea-Vietnam FTA Concluded after 28 Months of Talks
  • Oh Hae-young
  • 승인 2014.12.12 05:58
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The Korea-Vietnam free trade agreement has been reached on December 10 after 28 months of negotiations since beginning talks in August 2012. For Korean manufacturers producing automobiles, home electronics, and cosmetics will likely benefit as import duties on these items will be reduced by the agreement. Korean President Park Geun-hye held a meeting on the same day with Vietnamese Prime Minister Nguyen Tan Dung in Busan ahead of the 2014 ASEAN-Korea Commemorative Summit and declared a de facto conclusion of the free trade agreement between the two countries. Vietnam is the ninth largest trading partner to Korea and fourth largest in terms of foreign direct investment as of last year.

As a result, the rate of liberalization of the Vietnamese market will rise by 6 percentage points (worth US$740 million) to 92.2 percent from 86.2 percent under the Korea-ASEAN FTA. In terms of number of traded items, the liberalization ratio will rise to 89.2 percent (additional 200 items up for liberalization) from 87.0 percent. In particular, items that were not subject to market opening including passenger cars (over 3.0 liters), cargo trucks (5-20 tons), automotive parts, cosmetics, make-up goods, and home appliances (refrigerators, washing machines, rice cookers) were liberalized this time. But rice was not up for negotiations.

The liberalization ratio for Korea will rise by 3 percentage points (worth $170 million) 94.7 percent from 91.7 percent under the Korea-ASEAN FTA. In addition, Korea will grant a duty-free status to the imports of shrimp of up to 15,000 tons (worth $140 million). In terms of number of traded items, the liberalization ratio will increase by 495 items to 95.4 percent from 91.3 percent under the Korea-ASEAN FTA.

A Korean government official said, "Once the [Korea-Vietnam] free trade agreement goes into effect, it is likely to have an impact bigger than any other FTAs except the Korea-U.S. and the Korea-China FTA."


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