Korean cars to become cheaper in Vietnam on trade deal

Cars and other items imported from Korea will be cheaper next year when the ASEAN-Korea Free Trade Area comes into existence.

Cars and other motor vehicles designed primarily for passenger use will be subject to an import tariff of 5 percent instead of the current 8 percent, while the tax on parts will be cut from 20 percent to 15 percent .

Beef, pork, and fish will enjoy a 5 percent tax cut, following which the rates will be 10 percent for beef and 15 percent for the others.

Milk and dairy products, edible products of animal origin, vegetables of all kinds, cereals and cereal products will attract import taxes of 10 percent, 5 percent, 7 percent, and 15 percent, down from 15 percent, 8 percent, 15 percent, and 20 percent.

But the tariff on one of Vietnam’s main export items, textile and garments, will remain at 20 percent.

The leaders of the Association of Southeast Asian Nations (ASEAN) and Korea discussed the establishment of the AKFTA at the ASEAN-Korea Summit in October 2003. In a joint declaration the following year the leaders agreed to the establishment of the AKFTA upon the recommendations of an experts group.

The Framework Agreement was signed in December 2005 at the ASEAN-Korea Summit. The Agreement on Trade in Goods was concluded following negotiations in April 2006 and was signed a month later.

AKFTA’s objective is to move towards deeper economic integration between the two regions through progressive elimination of all barriers to increased trade and investment.

AKFTA will maintain flexibility, allowing for special or differential treatment in areas such as technical assistance and capacity building, especially for newer ASEAN members to compensate for different levels of development.

The scope of AKFTA includes trade liberalization and facilitation; areas for cooperation; and consultations and dispute settlement.

ASEAN groups Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.