Vietnam proposes removal of quota on shrimp export to South Korea

Published 2024년 4월 22일

Tridge summary

As the Vietnam-Korea Free Trade Agreement (VKFTA) approaches its 10th anniversary in 2024, it has notably reduced tariffs for most seafood products to 0%. Despite these reductions, seven Vietnamese seafood lines, including shrimp, are still subject to a preferential tariff quota of 15,000 tonnes annually when exported to the Republic of Korea (RoK), with any amount beyond this quota facing a 20% tax. This has particularly affected Vietnamese shrimp exports, with a significant portion of shipments to the RoK from 2016 to 2023 being taxed at the higher rate, thus diminishing their competitiveness in the Korean market. There is a pressing call for the RoK to remove the tariff quota for Vietnamese frozen shrimp under the VKFTA to maintain the market share and support the long-term interests of the Vietnamese shrimp industry.

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Original content

According to VASEP, 2024 is the 10th year of the effectiveness of the Vietnam-Korea Free Trade Agreement (VKFTA). According to the roadmap, most seafood products have their tax rate reduced to 0%. However, there are still seven seafood product lines from Vietnam exported to the RoK that only enjoy preferential tariffs based on quota (currently 15,000 tonnes per year). For this group, the RoK only exempts Vietnam from import tax under VKFTA for 15,000 tonnes per year (the quota level applied from 2020 onwards). The volume of imported products exceeding the quota will be subject to a tax rate of 20%. Thus, 34-48% of the Vietnamese shrimp output imported into the RoK was subject to a tax of 20% during the 2016-2023 period. This makes importers no longer motivated to increase purchases of Vietnamese shrimp to serve the growing demand in the RoK. Instead, they are considering buying more shrimp from other countries (such as Peru) with agreements with the RoK and an import tax rate of ...

Source: WTOCenter