Vietnam’s leading seafood trade group claims unfair treatment by South Korea
Vietnam’s seafood trade association is complaining its members are facing unfair trade barriers in its exports of shrimp to South Korea.
In a letter sent to Vietnam’s Ministry of Industry and Trade in mid-March, the Vietnam Association of Seafood Exporters and Producers (VASEP) said despite the Vietnam-South Korea free-trade agreement (FTA), which entered into force in December 2015, South Korea has maintained a quota and tariff barrier to manage its imports of shrimp from Vietnam. The tax-free quota for shrimp exports from Vietnam to South Korea was raised to 15,000 metric tons (MT) annually in 2020, from 10,000 MT per year in the first year of the FTA.
However South Korean authorities require importers to obtain the quota through auction, which costs them a fee of between 14 and 16 percent of the import value. And any shrimp volume imported beyond this quota is subject to a 20 percent tariff.
As a result, Vietnamese shrimp has become less competitive in the South Korean market, and importers there are considering buying shrimp from alternative suppliers.
South Korea buys the fifth-most amount of shrimp by value from Vietnam, after the U.S., the E.U, Japan, and China. Vietnam supplies half of the around 100,000 MT of shrimp that South Korea imports every year, with sales reaching USD 468 million (EUR 432 million) in 2022, up 26 percent year-on-year, accounting for 10.9 percent of Vietnam’s overall shrimp-export value.
VASEP claims the country's shrimp industry is being treated unfairly as under the FTA between South Korea and Peru, there is currently no quota and no tariff for shrimp.
According to VASEP, Peru is the country benefitting the most from South Korea’s action.
The tariff for shrimp from Peru, imposed by South Korea under their FTA, has been gradually reduced to zero percent after five years, from 20 percent in August 2011. Subsequently, South Korea’s Peruvian shrimp imports experienced a tenfold increase between 2018 and 2022, with last year’s imports up 176 percent from 2021.
VASEP said it wants South Korea to zero out tariffs on Vietnamese shrimp as it has done with Peru. It has requested Vietnam’s Ministry of Industry and Trade and other relevant branches of Vietnam’s work with their counterparts in South Korea to abolish the quota and tariff on shrimp from Vietnam.
In a related move, VASEP has asked Vietnam’s Ministry of Finance and Ministry of Agriculture to eliminate Vietnam’s 2 percent import tax on soybean meal to support the domestic aquaculture sector.
Soybean meal is a primary ingredient in aquaculture feed production, comprising between 80 and 90 percent of the feed cost. However, the import price of soybean meal remains high because it is not exempt from import taxes, leading to higher aquafeed prices for local farmers ...
Photo courtesy of VASEP