How to take advantage of RCEP to increase exports of Vietnamese goods to South Korea?
• Solutions to leverage opportunities from specific commitments of RCEP
The commitments on market openness in RCEP has created many opportunities for Vietnamese businesses to export to the Korean market. Therefore, businesses need to understand the relevant commitments of RCEP in order to take full advantage of benefits from this agreement:
- Learning about the tariff commitments for Vietnam in South Korea's Schedules of Tariff Commitments for ASEAN in Annex I of the RCEP Agreement.
However, it should be noted that South Korea's commitments on preferential tariffs in the Schedule of Tariff Commitments at RCEP is the minimum opening level. In fact, South Korea may open its market for a product (reduce or eliminate tariffs) at a higher or faster level than that of commitment in the Agreement. Therefore, to know the exact preferential tariff rate that South Korea applies to each Vietnamese product, it is necessary for businesses to check the preferential tariffs according to RCEP that South Korea applies to Vietnam every year. Businesses can look up tariffs at the following sources.
+ Free trade agreement (FTA) Portal by Korean Customs: https://www.customs.go.kr/ftaportalkor/ad/ftaCnvn/txrtInfo.do?mi=3526
+ Market Access Map (Macmap) by the International Trade Center (ITC): https://www.macmap.org/
+ Tariff Analysis Online (TAO) tool by WTO: https://tao.wto.org/
- Learning about rules of origin and procedures for certification of origin to enjoy RCEP tariff preferences in Chapter 3: Rules of Origin. In addition, Vietnam also issued a regulation on RCEP’s Rules of Origin in Circular No. 05/2022/TT-BCT dated February 18, 2022. Businesses need to carefully study this Circular and related guiding documents to fully meet the rules of origin and origin certification procedures to enjoy RCEP preferential tariffs when exporting to South Korea.
- Learning about other related issues such as Customs Procedures and Trade Facilitation (Chapter 4), Sanitary and Phytosanitary Measures (Chapter 5), Standards, Technical Regulations, and Conformity Assessment Procedures (Chapter 6), Trade Remedies (Chapter 7), etc. to ensure compliance with RCEP regulations and take advantage of the rights and protect the legitimate interests of businesses.
• Technical and market solutions
In order to export to the Korean market, Vietnamese products have to overcome a lot of barriers that the RCEP could hardly address, especially:
- South Korea's mandatory import requirements and regulations, such as regulations on food hygiene and safety standards, labeling and packaging, etc.;
- Demands and tastes of Korean consumers;
- Consumption trends, import and distribution channels of goods.
Therefore, in order to access the Korean market, Vietnamese businesses need to pay attention to:
- Get detailed information, update regularly, and ensure full compliance with Korean import regulations and procedures;
- Thoroughly research the Korean market, especially niche markets, to gain a detailed understanding of the tastes and needs of consumers, thereby changing and improving the quality and design of products to meet these demands and needs.
- Study how to build and promote the brand name for Vietnamese products in the Korean market;
- Learn about channels to approach importers/distributors of goods in South Korea, especially e-commerce channels that are increasingly popular and become the mainstream shopping trend of Korean consumers.
• Solutions to enhance competitiveness
Improving competitiveness is a sustainable solution for Vietnamese products to develop in both domestic and export markets. In order to achieve this, businesses need to pay special attention to the following solutions:
- Investing in technology, increasing technology content in production and processing (through joint ventures, association with domestic and foreign researchers and businesses; upgrading production process and technology, etc.);
- Investing in human resources: have a systematic plan for labor training, foster capacity for key staffs, technology engineers and market research specialists;
- Researching to improve quality, design, etc. of products to meet the demands and tastes of Korean consumers;
- Focusing on building brands, promoting products to Korean importers and consumers through different platforms (fairs, exhibitions, social media advertising, etc.) as well as focusing on warranty and after-sales policies, etc. to attract Korean consumers.
• Seeking information and support from the government, promotion agencies and trade associations
To further take advantage of benefits from RCEP, in the coming time the Government, promotion agencies, trade associations, etc. will have more activities to support businesses to increase export and import with other RCEP member countries (including South Korea). Vietnamese exporters can take advantage of these support activities to get information and advice on RCEP commitments; connections with Korean importers, and product promotion of Vietnamese products to consumers in this country.
Source: Center for WTO and International Trade
