ABOUT FTA

Benefits

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  • Goodsview

    • Overall Concessions on Goods
      • (Korea) Tariff elimination on 95.4% (tariff lines) and 94.7% (import value) within 10 years (natural honey, adzuki beans and sweet potato starch within 15 years)
      • (Vietnam) Tariff elimination on 89.9% (tariff lines) and 92.4% (import value) within 10 years (3 auto parts within 15 years)
    • Industrial Products
      • (Korea) Tariff elimination on 99.4% (tariff lines) and 99.5% (import value) within 10 years
      • (Vietnam) Tariff elimination on 89% (tariff lines) and 92.3% (import value) within 10 years (3 auto parts within 15 years)
    • Agricultural Products
      • (Korea) Tariff elimination on 75% (tariff lines) and 77.3% (import value) are to be eliminated within 15 years
      • (Vietnam) Tariff elimination on 92.4% (tariff lines) and 96.9% (import value) by 2018
    • Fishery Products
      • (Korea) Tariff elimination on 83.1% (tariff lines) and 90.1% (import value) within 10 years
      • (Vietnam) Tariff elimination on 100 % (tariff lines) and 100% (import value) by 2018
    • Major Export Items Current State of Trading
      • Electronics
        • Washers, Refrigerators, AirConditoners, Electric Rice-Cookers : tariff elimination within 5 years (current tariff rate: 25%)
        • Mixer : tariff elimination within 5 years (current tariff rate: 25%)
      • Automotive
        • Some Truck (5~20 ton, current tariff rate: 30%) and Automotive (over 3,000cc, current tariff rate: 68%) : tariff elimination within 10 years
      • Auto parts
        • Most Items : tariff elimination within 5~10 years (current tariff rate : 7~25%)
        • Auto Engine : tariff elimination within 3~7 years (current tariff rate 5~25%)
      • Textile
        • Textiles such as cotton, synthetic staple fibers : tariff elimination within 3~10 years (current tariff rate 12%)
    • On August 2012, the initiation of negotiation was declared for Korea-Vietnam FTA
    • On September 2012, first negotiation occurred and nine times of official negotiation was held.
      • Overall Items Offer Rate
      • (Korea) 95.4% (item number basis) or 94.7% (import amount basis) will have zero tariff within 10 years (natural honey, adzuki beens,
        sweet potato starch will have zero tariff within 15 years)
      • (Vietnam) 89.9% (items number basis) or 92.4% (import amount basis) will have zero tariff within 10 years (three auto parts will have
        zero customs within 15 years)
    • Industrial Items
      • (Korea) 99.4% (item number basis) or 99.7% (import amount basis) will have zero tariff within 10 years
      • (Vietnam) 89.9% (items number basis) or 92.4% (import amount basis) will have zero tariff within 10 years (three auto parts will have
        zero customs within 15 years)
    • Agricultural Items
      • (Korea) 75.0% (item number basis) or 77.3% (import amount basis) will have zero tariff within 15 years
      • (Vietnam) 92.4% (items number basis) or 92.4% (import amount basis) will have zero tariff within 10 years (three auto parts will have
        zero customs within 15 years)
    • Marine Items
      • (Korea) 83.1% (item number basis) or 90.1% (import amount basis) will have zero tariff within 10 years
      • (Vietnam) 100% (items number basis) or 100% (import amount basis) will have zero tariff until 2018
      • major 125 marine items (42.7% import amount basis) will have protective measures such as long item elimination, tariff rate quota or tariff exclusion
  • Rules of Originview

    • Improved product specific rules in comparison to the Korea-ASEAN FTA
    • Eased rules of origin for major industrial products, such as automobiles, machinery, electrical and electronics
      • Automobiles: added value criterion (RVC 45%) for finished automobiles and CTH for auto parts (gear box, axle)
      • Machinery, electrical and electronics: CTSH or added value criterion (RVC 40%) (more flexible than the Korea-ASEAN FTA)
      • Textiles and clothing: almost the same levels as the Korea-ASEAN FTA except for allowing flexibility for some textiles (e.g. curtains and blankets)
    • Wholly obtained criterion is applied to agricultural and fishery products
    • 100 items from the Gaeseong Industrial Complex are newly added
      • given opportunities to have FTA preferential tariffs based on CTSH
    • Authority-issued certificate of origin
      • Self-issued C/Os  freely issued by producers or exporters
      • Authority-issued C/Os  issued by related authorities of an exporting country on request of exporters
    • Validity is 1 year after the date of signature
    • C/Os can also be applied after import declaration
      • within 1 year after import
    • Indirect verification is adopted with occasional use of direct verification
      • Indirect verification: The customs authorities of the importing country request for verification to the customs authorities of the exporting country, which then notify the result to the customs authorities of the importing country
      • Direct verification: When the customs authorities of the importing country are not satisfied with the result, under the exceptional circumstances on-site investigation is allowed with written notification to the customs authorities of the exporting country and written consent of an exporter or a producer
  • Services and Investmentview

    • MFN and NT are applied to trade in services with follow-up negotiations on a negative list approach, and the prohibition of market entry requirements
    • Higher level of protection than the Korea-ASEAN FTA Investment Agreement and the Korea-Vietnam Bilateral Investment Treaty
      • Improved investment protection such as guarantee of transfers or reasonable compensation in the event of expropriation
    • Improved Investor-State Dispute (ISD) Settlement
      • ISD grants an individual investor the right to use dispute settlement against a foreign government
    • Paving the way for companies to expand to each other’s markets by adding annexes on financial services and telecommunication
  • Trade Rules & Cooperationview

    • E-Commerce Chapter that stipulates substantive regulations, e.g. zero tariffs on e-transmissions, online consumer protection and personal data protection
      • First independent e-commerce chapter in Viet Nam’s bilateral FTAs
    • WTO TRIPs-plus protection for copyrights, trademarks and patents, and practical remedies for infringement of rights
      • Highest level of IP protection in Viet Nam’s bilateral FTAs
    • Laying a basis for stronger cooperation on 4 areas of interest
      • (Industry) automobiles, steel & metal, petrochemicals, electronics, machinery, textiles & fabrics, and distribution & logistics
      • (Agricultural & fishery) agriculture, livestock, fishery & aquaculture, forest management and food processing
      • (Regulations & procedures) technical regulations & standards, customs administration, rules of origin and IPR
      • (Others) SME policies, statistics, fair competition, infrastructure and investment