Vietnam proposes removal of quota on shrimp export to RoK

22/04/2024    46

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 0%. This eliminates all tariff advantages from VKFTA for Vietnamese frozen shrimp products in the Korean market.

Faced with this situation, it is very urgent to request that the RoK remove the tariff quota for Vietnamese frozen shrimp under VKFTA to protect the market share and long-term benefits of Vietnamese shrimp in this market.