Thursday, December 8 2016

VietNamNews

Viet Nam and S Korea strike a trade deal

Update: May, 31/2015 - 12:00

South Korea wants to buy things from Viet Nam.

People there want garlic, honey, ginger and other things from this country.

Viet Nam also wants to buy things from South Korea.

People here want car parts and electronic equipment from that country.

The governments of the two countries have come up with a plan.

That is less tax should be charged on certain things that go from one country to the other.

Farmers harvest garlic on Ly Son Island in the central province of Quang Ngai. Tariffs for Vietnamese garlic, ginger and honey exports to South Korea will be reduced to zero per cent over the next 10-15 years under the recently signed free trade agreement between the two countries.
Farmers harvest garlic on Ly Son Island in the central province of Quang Ngai. Tariffs for Vietnamese garlic, ginger and honey exports to South Korea will be reduced to zero per cent over the next 10-15 years under the recently signed free trade agreement between the two countries. - VNA/VNS Photo Thanh Long

HA NOI (VNS) — The Republic of Korea has chosen Viet Nam as its first FTA partner that can export products such as garlic, ginger and honey with tariffs reduced to zero per cent over the next 10-15 years.

The information was shared at a conference to inform Vietnamese businesses about the recently signed FTA between the two countries on Thursday, organised by the Viet Nam Chamber of Commerce and Industry (VCCI).

The VCCI said the current export taxes applied to these products in the RoK stood from 241 to 420 per cent, but under the Viet Nam-Korean Free Trade Agreement (VKFTA) signed on May 5, taxes for these products would be held at zero per cent for the next 10 years.

This would give Viet Nam a significant competitive advantage over other competitors in the region such as China, Indonesia, Malaysia and Thailand, said Pham Khac Tuyen, head of the North East Asian Bureau under the Ministry of Industry and Trade.

Hong Sun, secretary general of the Korea Chamber of Business in Viet Nam, said the agreement was a big move as it included garlic, which is the first key ingredient for the Korean specialty, kimchi.

At the same time, Viet Nam will also be the RoK's first FTA partner to be able to export natural honey at a zero tariff 15 years after the agreement takes effect, according to the agreement.

The tariff on rambutan's will also be cut from the current 611.5 per cent to no less than 20 per cent from January 1, 2016. The export tax on tropical fruit like pineapple, guava, mango and mangosteen will also be dropped in the next ten years.

The RoK will eliminate tariffs for seven types of shrimps imported from Viet Nam from next year. In 2016, Viet Nam has a quota to export 10,000 tonnes to the RoK, with a 10 per cent increase each year. By 2020, the country could export 15,000 tonnes of shrimps per year without tariffs.

Currently, Viet Nam can only ship 2,500 tonnes without tax under the ASEAN Korean FTA. Current tariffs applied to imported shrimp from Viet Nam are 10 to 15 per cent.

According to the Viet Nam Association of Seafood Exporters and Producers, the South Korean market is the fifth largest consumer of Vietnamese shrimp, after the US, Japan, the EU and China. Viet Nam also overtook China to become the largest shrimp supplier to the RoK in 2014. In 2014, South Korea imported 62,878 tonnes of shrimp, including 27,791 tonnes from Viet Nam.

In return, Viet Nam will cut import taxes for textile raw materials, textiles, plastic materials, electronic components, trucks and passenger car automobile parts, electrical appliances, some iron and steel products, electrical wire rods and cosmetics.

Challenges remain

Chamber secretary Hong Sun said Korean companies were eager to invest in Viet Nam's agriculture sector, and the FTA was likely to induce more FDI.

He said Viet Nam had good natural conditions and human resources for agricultural production, but in terms of technology and manufacturing techniques, Viet Nam was still weak.

The RoK was experienced in technology and logistics, he said, adding that there should be a chance for future co-operation between the two sides.

However, MoIT official Tuyen said it would not be easy to enter the RoK market if local enterprises were not well prepared.

Instead, Tuyen advised local enterprises to co-operate with big Korean companies to seek advice about quarantine barriers. He said customs procedures and the RoK market were "very complicated", making it difficult for foreign brands to enter a market where local people only trusted their own products or well-known international brands.

Tuyen said Vietnamese enterprises should find established partners for their exports, such as Lotte Mart, Emart and Costco.

Chairman of the Viet Nam Beekeepers Association Dinh Quyet Tam said he did not expect much from the FTA, saying the RoK would enforce stricter quarantine regulations on products. Tam gave an example that under the FTA signed with Japan, they could export local honey products with no export tariffs, but other strict barriers had made very little difference to exports.

Nguyen Ton Quyen, general secretary of the Viet Nam Timber and Forest Products Association (Vifores), said the agreement would also bring stiff competition from the RoK with advanced technology and machinery, and lower prices. Quyen said that many Vietnamese enterprises would lose out. — VNS

 

GLOSSARY

The Republic of Korea has chosen Viet Nam as its first FTA partner that can export products such as garlic, ginger and honey with tariffs reduced to zero per cent over the next 10-15 years.

To export means to sell things to buyers in another country.

A tariff is a tax that you have to pay for a certain service.

If tariffs are reduced, their costs are made less.

The information was shared at a conference to inform Vietnamese businesses about the recently signed FTA between the two countries on Thursday, organised by the Viet Nam Chamber of Commerce and Industry (VCCI).

FTA stands for Free Trade Agreement.

The VCCI said the current export taxes applied to these products in the RoK stood from 241 to 420 per cent, but under the Viet Nam-Korean Free Trade Agreement (VKFTA) signed on May 5, taxes for these products would be held at zero per cent for the next 10 years.

Something that is current is to do with the present. Current export taxes are therefore export taxes that people are made to pay now. They could be different to those charged last year, or that will be charged next year.

This would give Viet Nam a significant competitive advantage over other competitors in the region such as China, Indonesia, Malaysia and Thailand, said Pham Khac Tuyen, head of the North East Asian Bureau under the Ministry of Industry and Trade.

If Viet Nam has a competitive advantage over other countries, it means it has a good chance to be better at supplying things to the Republic of Korea than those other countries.

Hong Sun, secretary general of the Korea Chamber of Business in Viet Nam, said the agreement was a big move as it included garlic, which is the first key ingredient for the Korean specialty, kimchi.

Food dishes are usually made from many different things. Kimchi contains cabbage and spices. They are therefore among the ingredients of kimchi.

The RoK will eliminate tariffs for seven types of shrimps imported from Viet Nam from next year.

To eliminate tariffs means to get rid of them.

In 2016, Viet Nam has a quota to export 10,000 tonnes to the RoK, with a 10 per cent increase each year.

If Viet Nam has a quota to export 10,000 tonnes to the Republic of Korea, it means that Korea has given it permission to sell that amount to Korea. No more.

In return, Viet Nam will cut import taxes for textile raw materials, textiles, plastic materials, electronic components, trucks and passenger car automobile parts, electrical appliances, some iron and steel products, electrical wire rods and cosmetics.

Import taxes are taxes that the government charges you when you buy something from someone in another country.

Electronic components are parts of electronic devices.

Cosmetics are things like make-up and lipstick that may make you look different but do not change the person you are!

Chamber secretary Hong Sun said Korean companies were eager to invest in Viet Nam's agriculture sector, and the FTA was likely to induce more FDI.

When Korean companies invest in Viet Nam's agricultural sector they put money into agricultural projects in Viet Nam in the hope of making more money from them.

To induce means persuade people to do what you have done, which in this case is to invest in Viet Nam.

FDI stands for foreign direct investment.

He said Viet Nam had good natural conditions and human resources for agricultural production, but in terms of technology and manufacturing techniques, Viet Nam was still weak.

Human resources are people who can be used to do certain jobs.

A technique is a way of doing something, in this case manufacturing which is making things in factories.

The RoK was experienced in technology and logistics, he said, adding that there should be a chance for future co-operation between the two sides.

Logistics is organising things to get from one place to another.

Co-operation means working together.

However, MoIT official Tuyen said it would not be easy to enter the RoK market if local enterprises were not well prepared.

Enterprises are businesses.

Instead, Tuyen advised local enterprises to co-operate with big Korean companies to seek advice about quarantine barriers.

Quarantine barriers are laws that stop live and raw vegetables or animals from being allowed into a country unless they go into a special place for a number of days for checking, so that any bugs on them that carry diseases can die off or cannot spread.

He said customs procedures and the RoK market were "very complicated", making it difficult for foreign brands to enter a market where local people only trusted their own products or well-known international brands.

Customs is the office of the people who work at border posts and check up on things that people bring into a country and take out of a country. They may charge them import or export taxes.

 

Find words that mean the following in the Word Search:

1. A Korean dish that has cabbage as an ingredient.

2. A country in the same region as Viet Nam that also trades with South Korea.

3. The system live animals must often go through when they enter another country.

4. The product that Dinh Quyet Tam is involved in.

5. The country that was the largest shrimp supplier to South Korea until last year.

 

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ANSWERS:

© Duncan Guy/Learn the News/ Viet Nam News 2015











































 

 

 1. Kimchi  2. Indonesia; 3. quarantine; 4. honey; 5. China.

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