New free trade deal to heighten economic ties with RoK
The Free Trade Agreement (FTA) between Vietnam and the Republic of Korea (RoK) will serve as a milestone to strengthen the two countries’ economic relations, expected to reach 70 billion USD in trade by 2020. This was revealed at a seminar on March 2 on economic co-operation between Vietnam and the RoK in the Post-FTA era.
Under the FTA, signed in December, the two countries will remove import tariffs on more than 90 percent of all products once the FTA is implemented, probably in June.
"This will not only expand trade and investment opportunities between the two countries, but help reinforce cooperation in various sectors, including industry, energy, agriculture and infrastructure," said Hae Moon Chung, Secretary General of ASEAN-Korea Centre.
According to the latest data from the RoK, the country rose to become Vietnam’s largest foreign investor last year in terms of both value and number of projects. This put it ahead of Japan, Taiwan (China) and Singapore.
Vietnam has risen as a manufacturing hub for Korean companies. More than 4,000 Korean firms having been set up here, including big corporations such as Samsung Electronics, POSCO Steel, LG electronics, Hyundai Heavy Industries and SK Energy.
Bilateral trade reached 30.3 billion USD in 2014, making the RoK Vietnam’s third-largest trading partner, after China and the United States.
Vietnam is the RoK’s eighth largest trading partner and the second largest among ASEAN member countries, next to Singapore, Chung said.
However, Vietnam has a high trade deficit with the RoK. The country’s exports reached just nearly 8 billion USD in 2014 while it imported up to 22.3 billion USD worth of goods from the north Asian nation.
Experts agreed that the bilateral FTA will help create additional economic gains for the two countries through accelerating export and investment cooperation that can benefit even small and medium enterprises.
According to Hoang Van Thang, Deputy Minister of Agriculture and Rural Development, the export structures of the two countries are complementary and have little direct competition.
Thang suggested the RoK government remove unnecessary non-tariff barriers for Vietnamese products to help increase the presence of Vietnamese goods in Korea, especially agricultural commodities.
Apart from the bilateral FTA, economic relations between Vietnam and the RoK will further be intensified due to cooperation in Korea-ASEAN and Korea-Mekong relations, said Chung.
The ASEAN-RoK FTA and Regional Comprehensive Economic Partnership (RCEPT) with 16 member countries are in-progress and scheduled to be concluded before the end of this year.
"The FTAs engaging Vietnam and the RoK will help realise the commitment made by leaders of the two countries to lift the bilateral trade volume to 70 billion USD by 2020," said Daejoo Jun, RoK ambassador to Vietnam.
Experts from the two countries also discussed the status and prospects of bilateral economic cooperation focusing on the industry, agriculture and infrastructure sectors, the three areas that receive high attention from both governments and businesses.
The seminar was organised by the National Research Council for Economics, Humanities and Social Sciences of Korea (NRCS) in collaboration with Thai Nguyen University of Economics and Business Administration.
