Businesses see wide door but difficulties to enter Korean market

After Vietnam-South Korea Free Trade Agreement (VKFTA) took effective in December 2015, South Korea has committed to cutting 95.4 percent of tax lines on Vietnamese goods.

Pepper is one of Vietnamese products having many export opportunities to South Korea (Photo: SGGP)

Pepper is one of Vietnamese products having many export opportunities to South Korea (Photo: SGGP)

Businesses have expected to boost export to the market however it has been more difficult than before as the country has tightened technical barriers.
According to the Ministry of Industry and Trade, despite enjoying tax incentives, Vietnamese farm products are always inspected most strictly. Therefore, the country has been able to export some products such as dragon fruit, mango, guava, banana, carrot, broccoli and cabbage with limited volume.
Processed vegetables and fruits must meet norms according to export certificates granted by Korean sides after they have inspected production lines and process from fields to harvest, storage, processing and preservation.
Mr. Hong Won Sik, representative of Lotte Group, said that Vietnamese agricultural products are more low-cost than Thai and Chinese goods but quality has not been ensured. They are not uniformed in size, flavor and color. Packaging technique is weak while products have not been carefully selected with rotten products, soil and leaves remaining in packages.
While South Korea’s import standards have been stricter, some Vietnamese businesses have been vague about export conditions to this market, resulting in low export turnover. Vietnam has still seen trade deficit from South Korea.
Mr. Nguyen Quang Phuc from Export Import Department under the Ministry of Industry and Trade said that Korean businesses and associations had carefully prepared conditions to enjoy tax incentives from the FTA before it took effect. Meantime, many Vietnamese firms have so far been unable to grasp fully information and enjoy benefits from the agreement.
The only way to boost export to South Korea is that businesses must quickly access regulations on quality, food safety and hygiene, renew technologies and abide by production and processing regulations to overcome technical barriers, he said.
He noticed businesses that South Korea has not only returned unqualified consignments but also penalized exporters for breaking contracts.
Mr. Chu Thang Trung, Vietnamese commercial counselor in South Korea, said that most of agricultural products in South Korea were imported from China during the past years. Recently, the country has started seeking new suppliers from Southeast Asia nations including Vietnam.
In 2016, Vietnamese agricultural, forestry and seafood export turnover to South Korea topped US$1.4 billion, accounting for 4 percent of the country’s import demand. This number is still low compared to the potential of Vietnamese firms who have strengths in agricultural and food products.
There are many opportunities for Vietnamese goods including processed vegetable and fruit, pepper, cashew nut, coffee, shrimp and cuttlefish to enter the Korean market if businesses can take advantage of incentives from VKFTA.
Mr. Trung advised firms to pay attention to taste of local consumers when exporting South Korea to have suitable adjustments, survey the market to access consumers and attend locally organized fairs. In addition, they should ensure food safety and hygiene, uniformed quality and eye catching package to lure more Korean consumers.

By MINH HAI – Translated by Hai Mien

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