The conference took place over 3 days with the participation of representatives from Korea and 10 ASEAN countries, and some delegates from member countries participated online.
Speaking at the opening of the conference, Mr. Nguyen Anh Son - Director of the Import-Export Department, Ministry of Industry and Trade said: According to the regulations of the World Customs Organization, the HS code of the Harmonized Commodity Description and Coding System is updated regularly every 5 years to ensure compliance with international trade needs. This update also requires the conversion of the commodity specific rules (PSR) in the ASEAN - Korea Free Trade Agreement.
Director of the Import-Export Department Nguyen Anh Son delivered the opening speech at the conference.
“Converting PSR on time will ensure predictability and transparency for businesses. Any delay in converting PSR will lead to increased costs and loss of FTA benefits,” Mr. Nguyen Anh Son emphasized.
ASEAN and Korea signed the Framework Agreement on Comprehensive Economic Cooperation in 2005 and the Agreement on Trade in Goods which took effect from June 2007. To ensure that goods of the right origin enjoy preferential tariffs, AKFTA stipulates how to determine origin. In order to implement the AKFTA Agreement, the ASEAN-Korea Economic Cooperation Subcommittee held a Conference on Origin of Goods to convert the Product Rules List (PSR) according to the Harmonized System of the World Customs Organization (WCO). This will facilitate importers to use the Certificate of Origin (C/O) form AK to enjoy special preferential tariffs under AKFTA.
With the success of the similar conference in 2018 in Vietnam, the Korean partner and ASEAN member countries received many positive responses about the role of the host country Vietnam in organizing the conference and within the framework of the AKFTA Agreement. This conference had officials and experts from Korea and 10 ASEAN countries to review and discuss nearly 7,000 tax lines, progress and implementation mechanisms of rules of origin under the new HS.
Recently, Korea has been one of the leading markets for importing goods from Vietnam with the highest rate of FTA preferential use. In 2023, the Korean market had a preferential C/O usage rate of 52.1%, with the export turnover of goods with C/O to Korea reaching 12.2 billion USD. Enterprises have a certain awareness of using preferential C/O as an effective tool in business plans when exporting goods to Vietnamese markets with commitments to enjoy preferential tariffs. With the legal framework of Decree 31/2018/ND-CP and guiding Circular; as well as promoting propaganda and dissemination to enterprises in the period of 2014-2023, enterprises' awareness has changed significantly.
The export group to Korea with the best FTA preferential utilization rate includes seafood (96.32%). Agricultural products such as vegetables, coffee and pepper all have very high preferential C/O utilization rates, reaching 91.18%, 94.54% and 100% respectively. Wood and wood products (73.76%); footwear and textiles have a rate of nearly 100%.
In the ASEAN-Korea Trade in Goods Agreement (AKFTA), Vietnam committed to eliminating import taxes on about 86% of total tax lines in 2018, reducing the remaining 14% of total tax lines to 5% by the end of the roadmap (2021) and partially cutting tax rates in 2021 or maintaining the MFN tax rate.
In the context that Vietnamese goods have many opportunities to enjoy tariff preferences in FTA markets, the rules of origin are the tool to neutralize the advantages of FTAs if the goods do not meet the requirements and are the tool to distinguish the advantages of FTA countries from those of countries outside the FTA.
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