ASEAN – Korea Free Trade Agreement (AKFTA)
Viet Nam has joined AKFTA since 2005 and has implemented its commitment to import duty since 2007.
1. Viet Nam’s commitment to tariff reduction
Viet Nam commits to eliminate import tariff rate for about 86% of total tariff lines by 2018, the remaining 14% will be: (i) reduced to 5% by the final year of tariff reduction schedule (2021), and (ii) partially reduced by 2021 or remained the applied MFN rate.
Continuing to fulfill the commitment, the Ministry of Finance of Viet Nam promulgated Circular No. 167/2014/TT-BTC dated 15/11/2014 and Circular No. 44/2015/TT-BTC dated 30/3/2015 guided the special preferential import duty of Viet Nam under AKFTA for the period from 2015 to 2018. From 2015, Viet Nam will eliminate the tariff rate of 7.366 tariff lines (or 77.6% of total tariff lines) that mainly focus on some item groups, such as: agricultural products, equipments and their parts, textile, fishery, paper, chemical, products from iron, steel and basic metal,… By 2018, total number of tariff lines for tariff elimination will be 8.184 (accounting for 86% of total tariff lines).
The final tariff reduction of AKFTA Schedule is on 2021. Apart from tariff lines eliminated in 2018, 620 tariff lines will be tentatively reduced tariff rate to 5% (including electronics, mechanics, iron, steel and basic metal, petrochemistry products, machinery parts, some types of specialized cars,…); the rest of tariff items are not committed or remain high tariff rate, including cars, car accessories and spare parts of cars, motorbikes, bikes, home electric appliances, iron and steel, alcohol beverages, tobacco, petrol,…
2. Korea’s tariff commitment for Viet Nam
Korea completed its AKFTA Tariff Reduction Schedule in 2010. Accordingly, up to now, 90.9% goods items of Viet Nam will be applied 0% tariff rate when exporting to Korea with C/O form. Product groups that will be exempted or partially reduced tariff rate by Korea at the end of Tariff Schedule are: some types of fishery (shrimp, crab, frozen fish, canned fish), agricultural items (dairy products, honey, garlic, ginger, red bean, sweet potato), tropical fruits, and industrial products (such as garment, mechanical products,…).