Title
Republic of Korea-Viet Nam Free Trade Agreement
Preamble
The Government of the Republic of Korea (“Korea”) and the Government of the Socialist Republic of Viet Nam (“Viet Nam”), hereinafter referred collectively to as the “Parties” and individually as a “Party”:
Recognizing their longstanding and strong friendship and the need to strengthen their close economic relations;
Convinced that a free trade area will create an expanded and secure market for goods and services in their territories and a stable and predictable environment for investment, thus enhancing the competitiveness of their firms in global markets;
Recognizing the need to strengthen the framework for broader and deeper economic cooperation;
Desiring to promote economic growth and create new employment opportunities;
Recognizing the different levels of economic development between the Parties;
Seeking to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to trade and investment between them;
Promoting a predictable, transparent, and consistent business environment that will assist enterprises in planning effectively and using resources efficiently;
Resolved to contribute to the harmonious development and expansion of world trade by removing obstacles to trade through the creation of a free trade area;
Building on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other multilateral, regional, and bilateral agreements to which both Parties are party; and
Reaffirming their desire to build upon their commitments under the Framework Agreement on Comprehensive Economic Cooperation among the Governments of Republic of Korea and the Member Countries of the Association of Southeast Asian Nations and other relevant agreements pursuant to the Framework Agreement;
HAVE AGREED as follows:
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Establishment of a Free Trade Area
Consistent with Article XXIV of GATT 1994 and Article V of GATS, the Parties hereby establish a free trade area.
Article 1.2. Objectives
The objectives of this Agreement are to:
(a) achieve the substantial liberalization of trade in goods between the Parties, in conformity with Article XXIV of GATT 1994;
(b) achieve the substantial liberalization of trade in services and investment between the Parties, in conformity with Article V of GATS;
(c) promote competition in their economies, particularly as it relates to economic relations between the Parties;
(d) adequately and effectively protect intellectual property rights; and
(e) establish a framework to enhance closer cooperation in the fields agreed by the Parties in this Agreement.
Article 1.3. Relations to other Agreements
1. The Parties reaffirm their rights and obligations under existing agreements to which both Parties are party, including the WTO Agreement and the Korea-ASEAN FTA.
2. For greater certainty, this Agreement shall not be construed to derogate from any international legal obligation between the Parties that provides for more favorable treatment of goods, services, investments, or persons than that provided for under this Agreement.
3. Unless otherwise provided in this Agreement, in the event of any inconsistency between this Agreement and any agreement to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution.
Article 1.4. Extent of Obligations
In fulfilling its obligations and commitments under this Agreement, each Party shall ensure within its territory the observance by local governments and authorities and by non- governmental bodies in the exercise of powers delegated to them by central or local governments or authorities.
Article 1.5. General Definitions
For the purposes of this Agreement, unless otherwise specified,
Agreement on Agriculture means the Agreement on Agriculture, in Annex 1A to the WTO Agreement;
Anti-Dumping Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, in Annex 1A to the WTO Agreement;
Korea-ASEAN FTA means the Framework Agreement on Comprehensive Economic Cooperation among the Governments of Republic of Korea and the Member Countries of the Association of Southeast Asian Nations and other relevant agreements stipulated in paragraph 1 of Article 1.4 of the Framework Agreement;
customs authority means the authority that, in accordance with the legislation of each Party, is responsible for the administration and enforcement of its customs laws and regulations:
(a) for Korea, the Ministry of Strategy and Finance, or the Korea Customs Service; and
(b) for Viet Nam, the General Department of Viet Nam Customs;
or their respective successors;
customs duties means any customs or import duty and a charge of any kind, including any form of surtax or surcharge, imposed in connection with the importation of a good, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article III:2 of GATT 1994, in respect of like, directly competitive, or substitutable goods of a Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) duty imposed pursuant to a Party’s laws and regulations consistently with Chapter 7 (Trade Remedies);
(c) fee or other charge in connection with importation commensurate with the cost of services rendered;
(d) premiums offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions or tariff rate quotas; or
(e) duty imposed pursuant to any agricultural safeguard measure taken under the WTO Agreement on Agriculture;
customs laws and regulations means such laws and regulations administered and enforced by the customs authorities of the Parties concerning the importation, exportation, transit or transshipment of goods, as they relate to customs duties, charges, and other taxes, or to prohibitions, restrictions, and other similar controls with respect to the movement of controlled items across the boundary of the customs territory of each Party;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, in Annex 1A to the WTO Agreement;
days means calendar days including weekends and holidays;
enterprise means any entity duly constituted or otherwise organized under applicable laws and regulations, whether for profit or otherwise, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organizations;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, in Annex 1B to the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, including its notes and supplementary provisions, which is a part of the WTO Agreement;
goods means any merchandise, product, article, or material;
Harmonized System (HS) means the nomenclature of the Harmonized Commodity Description and Coding System defined in the International Convention on the Harmonized Commodity Description and Coding System, including all legal notes thereto, as in force and as amended from time to time;
Joint Committee means the Joint Committee established under Article 17.1(Joint Committee);
juridical person means any legal entity duly constituted or otherwise organized under applicable laws and regulations, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
measure means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action or any other form;
measures adopted or maintained by a Party means measures adopted or maintained by:
(a) central or local governments and authorities; and
(b) non-governmental bodies in the exercise of powers delegated by central or local governments and authorities;
national means:
(a) for Korea, a Korean national within the meaning of the Nationality Act, as amended; and
(b) for Viet Nam, any person who is a citizen of Viet Nam within the meaning of its Constitution and the Law on Vietnamese Nationality, as amended;
originating goods means products or materials that qualify as originating under the Chapter 3 (Rules of Origin and Origin Procedures);
person means a natural person or a juridical person or an enterprise;
preferential tariff treatment means tariff concessions granted to originating goods as reflected by the tariff rates applicable under this Agreement;
Safeguards Agreement means the Agreement on Safeguards, in Annex 1A to the WTO Agreement;
SCM Agreement means the Agreement on Subsidies and Countervailing Measures, in Annex 1A to the WTO Agreement;
territory means:
(a) for Korea, the land, maritime, and airspace under its sovereignty, and those maritime areas, including the seabed and subsoil adjacent to and beyond the outer limit of the territorial seas over which it may exercise sovereign rights or jurisdiction in accordance with international law and its domestic law; and
(b) for Viet Nam, the land territory including mainland and islands, internal waters, territorial sea, and airspace above the territory, the maritime areas beyond territorial sea, including the continental shelf, exclusive economic zone, and natural resources thereof over which Viet Nam exercises its sovereignty, sovereign rights, or jurisdiction in accordance with its domestic law and international law;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, in Annex 1C to the WTO Agreement;
UNCITRAL means the United Nations Commission on International Trade Law;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994.
Chapter 2. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Article 2.1. Scope
Except as otherwise provided for in this Agreement, this Chapter shall apply to trade in goods between the Parties.
Section A. National Treatment
Article 2.2. National Treatment on Internal Taxation and Regulation
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes. To this end, Article III of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
Section B. Reduction or Elimination of Customs Duties
Article 2.3. Reduction or Elimination of Customs Duties
1. Except as otherwise provided for in this Agreement, each Party shall progressively reduce or eliminate its customs duties on originating goods in accordance with its Schedule to Annex 2-A.
2. Upon request of a Party, the Parties will consult to consider accelerating the reduction or elimination of customs duties set out in their Schedules to Annex 2-A. An agreement by the Parties to accelerate the reduction or elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their Schedules to Annex 2-A for that good when approved by each Party in accordance with its applicable legal procedures.
3. A Party may unilaterally accelerate the reduction or elimination of customs duties set out in its Schedule to Annex 2-A at any time if it wishes to amend the Schedule to Annex 2-A. That Party shall promptly notify the other Party through a diplomatic note after completion of the internal procedures required for the amendments to enter into force. Such amendments shall enter into force on the date specified in the diplomatic note, or in any event, within 90 days of such notification. Any concession granted by the Party according to the unilateral acceleration set out therein shall not be withdrawn.
4. If at any moment a Party reduces its applied most-favored-nation (hereinafter referred to as “MFN”) customs duty rate after the date of entry into force of this Agreement, that duty rate shall apply as regards trade covered by this Agreement if and for as long as it is lower than the customs duty rate calculated in accordance with its Schedule to Annex 2-A.
Article 2.4. Standstill
Except as otherwise provided for in this Agreement, neither Party may increase any existing customs duty as specified in that Party’s Schedule to Annex 2-A, or adopt any new customs duty, on an originating good of the other Party. This shall not preclude that a Party may:
(a) raise a customs duty on an originating good of the other Party that was unilaterally reduced other than as provided for in paragraph 2 or 3 of Article 2.3 to the lower of the levels established either in its Schedule to Annex 2-A or pursuant to paragraph 2 or 3 of Article 2.3; or
(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.
Section C. Special Regimes
Article 2.5. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the following goods imported into the customs territory of a Party for specific purposes and intended for re- exportation within a specified period and without having undergone any change except normal depreciation due to the usage made of them, and meeting all the requirements of this Article, regardless of their origin:
(a) professional equipment, including equipment for the press or television, software, and broadcasting and cinematographic equipment, necessary for carrying out the business activity or profession of a person who qualifies for temporary entry pursuant to the laws of the importing Party;
(b) goods intended for display or demonstration;
(c) commercial samples and advertising materials; (1) and
(d) goods admitted for sports purposes.
2. Each Party shall, upon request of the person concerned and for reasons its customs authority considers valid, extend the time limit for temporary admission beyond the period initially fixed in accordance with its domestic laws and regulations.
3. Neither Party may condition the duty-free temporary admission of a good referred to in paragraph 1, other than to require that the good:
the other Party in the exercise of the business activity, profession, or sport of that person;
(b) not be sold or leased while in its territory;
(c) be accompanied by a security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;
(d) be capable of identification when exported;
(e) be exported on the departure of the person referenced in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish;
(f) be admitted in no greater quantity than is reasonable for its intended use; and
(g) be otherwise admissible into the Party’s territory under its domestic laws and regulations.
4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duy and apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalties provided for under its domestic law and regulations.
5. Each Party shall endeavor to adopt and maintain procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of the other Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national or resident.
6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.
7. In accordance with its domestic laws and regulations, each Party shall provide that the importer or other person responsible for a good admitted under this Article shall not be liable for failure to export the good on presentation of satisfactory proof to the importing Party that the good has been destroyed within the original period fixed for temporary admission or any lawful extension.
8. Subject to Chapters 8 (Trade in Services) and 9 (Investment):
(a) each Party shall allow a container used in international traffic that enters its territory from the territory of the other Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such container; (2)
(b) neither Party may require any security or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a container;
(c) neither Party may condition the release of any obligation, including any security, that it imposes in respect of the entry of a container into its territory on its exit through any certain port of departure; and
(d) neither Party may require that the carrier bringing a container from the territory of the other Party into its territory be the same carrier that takes the container to the territory of the other Party.
Article 2.6. Goods Re-Entered after Repair or Alteration
1. In accordance with its domestic laws and regulations, neither Party may apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether the repair or alteration:
(a) could be performed in the territory of the Party from which the good was exported for repair or alteration; or
(b) has increased the value of the good.
2. In accordance with its domestic laws and regulations, neither Party may apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of the other Party for repair or alteration.
3. For the purposes of this Article, “repair or alteration” does not include an operation or process that:
(a) destroys a good’s essential characteristics or creates a new or commercially different good; or
(b) transforms an unfinished good into a finished good.
Article 2.7. Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials in accordance with its domestic laws and regulations, imported from the territory of the other Party, regardless of their origin, but may require that:
(a) the samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or
(b) the advertising materials be imported in packets that each contain no more than one copy of each such material and that neither the materials nor the packets form part of a larger consignment.
Section D. Non-Tariff Measures
Article 2.8. Import and Export Restrictions
1. Except as otherwise provided for in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation of any good destined for the territory of the other Party, except in accordance with its WTO rights and obligations. To this end, Article XI of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties understand that GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in the enforcement of countervailing and antidumping duty orders and undertakings;
(b) import licensing conditioned on the fulfillment of a performance requirement; or
(c) voluntary export restraints inconsistent with Article VI of GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the Anti-Dumping Agreement.
3. In the event that a Party, in accordance with its WTO rights and obligations, adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, no provision of this Agreement shall be construed to prevent that Party from:
(a) limiting or prohibiting the importation of the good of the non-Party from the territory of the other Party; or
(b) requiring as a condition for exporting the good of that Party to the territory of the other Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
4. In the event that a Party, in accordance with its WTO rights and obligations, adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, upon request of either Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing, or distribution arrangements in the territory of the other Party.
5. Neither Party may, as a condition for engaging in importation or for the importation of a good, require a person of the other Party to establish or maintain a contractual or other relationship with a distributor in its territory.
6. For greater certainty, paragraph 5 does not prevent a Party from requiring a person referred to in that paragraph to designate an agent for the purposes of facilitating communications between its regulatory authorities and that person.
7. For the purposes of paragraph 5, distributor means a person of a Party who is responsible for the commercial distribution, agency, concession, or representation in the territory of that Party of goods of the other Party.
Article 2.9. Import Licensing
1. Neither Party may adopt or maintain a measure that is inconsistent with the Import Licensing Agreement. (3)
2. (a) Within 30 days after this Agreement enters into force, each Party shall notify the other Party of its existing import licensing procedures, if any. The notification shall:
(i) include the information specified in Article 5 of the Import Licensing Agreement; and