Challenges from RCEP for Vietnam's exports to the Korean market
• The increasing competition pressure with other RCEP members
Besides expected opportunities, RCEP also poses many challenges to Vietnam, especially from the perspective of competitive pressure in the export market. Because RCEP provides preferential tariffs/rules of origin for all member countries, not just Vietnam, to enter the Korean market, which means that Vietnam's exports in the Korean market will face more intense competition from many competitors in the region, especially countries with almost similar export product structures and direct competition with Vietnam, such as China or some ASEAN countries.
• Other regular challenges
Besides the challenges associated with RCEP, Vietnam's export of goods to South Korea also faces many other regular challenges, especially non-tariff measures (NTMs).
NTMs refer to all measures other than tariffs that countries apply to goods moving across borders. In principle, these measures are applied to realize the legitimate management goals of each country (protecting human’s health and life, food safety, environmental protection, etc.). However, in many cases, NTM may be abused as a form of import restriction.
South Korea's NTM measures are generally applied to imported goods (not just goods from Vietnam) and are not related to RCEP. However, tariff reductions and more favorable rules of origin could be a catalyst to promote the increase in NTMs, causing Vietnam's exported goods to face additional or stricter requirements from the Korean market.
Source: Center for WTO and International Trade
