(vasep.com.vn) With some trade agreements signed with Japan and Korea such as Japan-Vietnam Economic Partnership Agreement (VJEPA), Vietnam-Korea Free Trade Agreement (VKFTA), ASEAN Japan Comprehension Economic Partnership (AJCEP), and ASEAN Korea Free Trade Agreement (AKFTA), Vietnamese products sent to these two countries are going to benefit from a reduction or a future exemption of import taxes. However, Vietnamese export companies also need to find measures to overcome Japanese and Korean non-tariff barriers imposed on imported agricultural and seafood items.
VJEPA came into effect since October 1st, 2009. This has been the first free trade agreement since Vietnam became the full member of WTO and the second agreement between Vietnam and Japan after the two countries joined the AJCEP signed in 2008. VJEPA was a comprehensive agreement, including many sectors such as commercial goods and services, investment as well as business environment improvement.
Vietnam and South Korea both joined the AKFTA. Under this agreement, the two countries further opened markets through giving privileges on some commercial goods and services. In August 2012, the two sides kicked off negotiations on Vietnam – Korea Free Trade Agreement with an aim to strengthen their bilateral economic cooperation. During the official visit of Korean President to Vietnam in last September, Vietnam and South Korea agreed to further negotiations towards a conclusion of the VKFTA at a higher and comprehensive level in 2014, as well as analyse the development gap between the two economies.
The VJEPA and AKFTA, if implemented coherently, will become one of important factors to improve commercial exchanges of Vietnam with Japan and Korea.
Japan has made a huge reduction of taxes on imported agricultural and seafood products, offering opportunities for Vietnamese exporters to sell products into the market. As the result, Vietnam’s exports to Japan were boosted. In 2012, agricultural products sent to this market brought back US$285 million of revenue, two-fold higher than that of 2009.
Though shipments of agricultural and seafood products from Vietnam to Japan kept increasing in value over the recent years, they just made up of a small proportion in Japanese total imports. Korea was also a big consumer of fishery products from other producing countries, but its purchase from Vietnam accounted for only 5 percent in total import value. Therefore, Vietnamese exporters will have more opportunities to boost shipments and develop shares in these markets.
Apart from a future import tax reduction and exemption under trade agreements, Vietnam needs to call for a removal of non-tariff barriers by Japan and Korea in order to enhance sales of agricultural and seafood products to these two destinations.