President Park Geun-hye announced the conclusion of a bilateral free trade agreement (FTA) between Korea and Vietnam at a press conference in Busan on Dec. 10, after a summit with Prime Minister Nguyen Tan, which was held as part of the ASEAN-Korea Commemorative Summit.
The deal makes Vietnam the nation's 15th FTA partner and the 5th country to finalize the deal with the current administration, following New Zealand.
It took 2 years and 4 months to conclude the deal, after both countries declared the start of negotiations at a bilateral ministerial meeting in August 2012.
The two sides reached agreement on all of the 17 chapters, including products, services, investment, intellectual property, and competition. In particular, Vietnam included e-commerce as a separate chapter for the first time.
Both countries have negotiated in a manner that will additionally open up items that had been excluded from the ASEAN-Korea FTA.
Vietnam will remove import tariffs on 92.2 percent of all products once the FTA is implemented, up 6 percent from the 86.2 percent of the ASEAN-Korea FTA.
Vietnam's trade liberalization ratio jumped from 87 percent of the ASEAN-Korea FTA to 89.2 percent by opening up 200 more products. In particular, automobiles with engine of more than 3000 ccs, 5 to 20 ton trucks, auto parts, cosmetics, and household appliances were liberalized, which were not opened up through the ASEAN-Korea FTA.
When it comes to the amount of imports, Korea's trade liberalization ratio rose to 94.7 percent, a 3 percent increase from the 91.7 percent of the ASEAN-Korea FTA. In addition, it was decided that no tariffs will be imposed on up to 15,000 tons of shrimp, up to US$140 million.
As for the number of items, the ratio grew from 91.3 percent to 95.4 percent with the additional liberalization of 495 items.
Garlic and ginger were also included, but rice, a sensitive product for Korean farmers, was excluded from the deal.