Minister of Trade, Industry and Energy Yoon Sang-jick and Vietnam's Minister of Industry and Trade Vu Huy Hoang finalized the free trade pact in the presence of Vietnamese Prime Minister Nguyễn Tấn Dũng in Hanoi on May 5. 

According to this latest free trade deal, Korea will lift tariffs on a total of 409 goods while Vietnam will remove tariffs on 272 goods, all occurring in stages over the next 15 years. 

Minister Yoon emphasized the meaning of the deal by saying, "Thanks to the Korea-Vietnam FTA, Korea's investments in Vietnam will expand, which will help Vietnam's economic advancement and increase the volume of bilateral trade. This will be an exemplary model of a win-win FTA, mutually beneficial for each other.” 

Minister of Trade, Industry and Energy Yoon Sang-jick (seated, left) and Vietnam's Minister of Industry and Trade Vu Huy Hoang sign the FTA documents on May 5 in Hanoi, with Vietnamese Prime Minister Nguyễn Tấn Dũng in attendance.

The Korea-Vietnam FTA will remove tariffs on more goods than are covered by the Korea-ASEAN FTA, which took effect in June 2007. Rules that promote trade are applied to the most recent trade deals. 

Some goods that had been excluded from the gradual tariff elimination plan of the Korea-ASEAN FTA are included in this latest free trade pact. These include white goods, such as washing machines and refrigerators, and cosmetics. For example, Vietnam will lift its 25 percent tariff imposed on Korean washing machines and refrigerators over the next ten years. The country will also remove its 30 percent and 20 percent tariffs imposed on Korean air conditioners and rice cookers, respectively, also over the next ten years. No tariffs will be applied to freight vehicles or on automobiles with engine capacities larger than 3,000 cc.

Minister of Trade, Industry and Energy Yoon Sang-jick (second from left) and Vietnam's Minister of Industry and Trade Vu Huy Hoang (second from right) pose for a photo after signing the Korea-Vietnam FTA.

Korea will gradually ease or remove tariffs imposed on agricultural produce imported from Vietnam. The Korean government will lift tariffs imposed on farming produce, such as tropical fruits, ginger and garlic, within ten years. Tariffs imposed on other agricultural products, like natural honey, red beans and sweet potato starch, will be removed over a 15-year timeframe. Rice is excluded from the deal. 

According to the trade ministry, Korea was Vietnam's largest trade partner last year, with Korean firms investing a total of USD 18.9 billion in Vietnam in 2014. Approximately 4,000 Korean companies currently operate in the country. The Korea-Vietnam FTA will take effect after receiving approval from the National Assembly this year and passing through other necessary procedures. 

Source: Korea.net

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