Vietnamese shrimp at risk of losing market share in South Korea

For the South Korean market, if the quota mechanism under the VKFTA is not lifted, Vietnamese shrimp will face the risk of losing competitiveness against Peruvian shrimp.

Recently, the Vietnam Association of Seafood Exporters and Producers (VASEP) issued Document No. 47/CV-VASEP to Prime Minister Phạm Minh Chính, the Minister of Industry and Trade, the Minister of Agriculture and Rural Development, and the Minister of Foreign Affairs, proposing the removal of quotas for Vietnamese shrimp imports into South Korea.

However, according to the quota commitment in Appendix 2A-1 on customs quota management of South Korea under the VKFTA, there are still seven groups of seafood products imported from Vietnam into South Korea that only enjoy preferential tariffs under the quota mechanism (currently exempt from tax quota of 15,000 tons/year).

Specifically, for this group, South Korea only exempts Vietnamese imports from VKFTA tariffs for 15,000 tons/year. Imported volumes exceeding the quota will not enjoy VKFTA tariff preferences and will be subject to the base tax rate of 20%.

For shrimp products alone, during the period from 2016 to 2023, between 34-48% of Vietnamese shrimp imported into South Korea have been subject to the 20% tax rate beyond the quota. This has led South Korean importers to lose motivation to increase purchases of Vietnamese shrimp. Instead, they are considering buying more shrimp from other countries (such as Peru) with Free Trade Agreements with South Korea, where the import tax has been reduced to 0%. If the quota mechanism under the VKFTA is not removed, Vietnamese shrimp will face the risk of losing market share to Peru.

Meanwhile, comparing with Vietnam’s latest updated import tax schedule (in 2024), all taxes on seafood imports from South Korea into Vietnam are already at 0%. Thus, Vietnam has fully opened its doors to South Korean seafood, but in return, still faces export quota restrictions for shrimp sent to South Korea.


Related Articles

Leave a Reply

Your email address will not be published.

Back to top button